I don't think the banks will bankrupt Centro (whilst Centro continue to make the payments).
But the question is at what cost will this come. If there is a debt for equity swap then, in the short term I feel this will not be good for the shareprice.
People say that Centro have the upper hand in this circumstance. I do not subscibe to that theory. The mere fact that banks face a loss does not mean that Centro is in the drivers seat. That theory relies on the assumption that banks act rationally. They don't!!
I think the market has largely factored in the results that will be coming tomorrow. Whether we move up or down tomorrow is irrelevant for the future.
The real effect on the shareprice will be when they announce the debt for equity swap or whatever they decide on.
The one thing I do wish is that they would come to the shareholders first to seek to raise funds rather than doing something with the banks, which I feel will, in the short term, have a detrimental impact on the shareprice.
Ultimately though, in the long term, I feel any resolution to this matter will be positive.
CNP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
