why the fall, page-33

Having been in two of Centro's premium shopping centres over the weekend I am I think they would be looking pretty good on the revenue front. In Australia at least, they have quality assets in aretail sector that continues to experience strong sales growth - so strong that we as a nation are facing interest rate rises on the back of demand driven inflation. I know little of their US exposure.

There problem is very similar to that faced by that great ex aussie - Rupert Murdoch's News Ltd - many years ago. CNP need to rollover some of their debt financing and in the present market this has proven difficult from their traditional lending sources. News was on the brink of collapse for similar reasons in the early 90's and, if you believe the stories, their billions in loans all rested with a small town bank somewhere in the US that financed only a couple of million of the billions. Rupert himself, it is said, had to go out and plead the case to the banker -a guy that had no idea of the significance of his decision on the refinancing. One refusal would have had a domino effect on all loan facilities. Look at News now.

In the context of CNP's assets and revenues, 1.3 Billion is not a great amount either. But, it is significant if they are unable to work around it. I suspect that they have been working their butts off on this for a couple of months and haven't had much success. However, I suspect that they will find a workable solution by Feb. A number of their shopping centres would be worth at least that.

Some sanity seems to be returning as the price is back to 80 from 42. If they pull it off, those that bought at 42 will be getting greater than 100% yield on distribution should return to paying them at similar levels. Suspending the distribution was a wise thing to do in the circumstances.