CNP 0.00% 4.0¢ cnpr group

certainty and stability established

  1. 297 Posts.
    Together with the successful refinancing of all outstanding debt, the restructure will bring further stability to Centro Retail and Centro Group as a whole. It was interesting to note the positive sentiment in the media especially the article on Bloomberg sighting "more certainty" about Centro's future prospects.

    As i have forementioned in the past, my very close connenction in a leading financial institution is almost certain that the upcmoing transaction will not involve any outright placement - instead a transaction unlocking value in assets such as CSF will be the likely outcome. He makes a good point - if they wanted to issue shares they could have simply employed Pattersons to conduct a raising.
    This will be a complicated transaction and one which will unlock significant value for Centro likely incorporating a renewed dividend reinvestment plan. I expect that the costs incurred to roll this plan out will be a fraction of what was paid out to KPMG and the banks for the stabilisation plan earlier this year. A dividend was still paid despite this significant outlay in FY09.

    Quite Seriously CER now becomes one of the safest and the most undervalued REIT plays on the market - one which will make a distribution in line with constitutional policies for FY10. With ALL refinancing issues behind CER, and a restructure under way which will unlock much value for Centro investors this to me presents as a sound investment.
    Remarkable how CER traded in the 40c+ range during the hights of uncertainty - just goes to show the incredible upside for this company's SP considering the current 15.5c SP.

    Centro's share price has also been supressed in recent times with no successor to Rufrano being appointed. Rufrano has been brilliant and cultivating with his decision making over the past 18 months - however i expect that the announcement of a new reputable CEO may push the SP up sharply. With Glenn's imminent departure, Centro have to the end of January to bring news to the market - i suspect that this will be processed at the start of January to provide the successor a fair handover period. I'm glad that CER have taken its time identifying the best candidate for the role to take Centro back to where it once was. Shareholders can at least be assured that the decision will be calculated, well researched and certainly in the best interest of all shareholders.

    Importantly 20 assets were sold above book value (as announced last week) - this highlights the ever improving commercial property market and makes way for Significant write ups in the coming 6 months. Independent valuations (for those that arent aware) are generally conducted looking at the most recent historical assets sales in the region. Assets in both AUS and US have been sold at well above book value highlighting the improving conditions aroung the world - furthermore values will only rise as high cap rates become increasingly attractive to potential investors. Together with closure of Equity Hedges the NTA may well rise sharply in coming 6 months.

    Interestingly the REIT index in the US has risen sharply over the past 3 months, i expect that the Australian REITS will follow suite in due course as its come off 30-40% from its recent highs. Commercial property has and will rebound more quickly than what most anticipate.

    With an excellent board willing to take CER to the next level there is much to be excited about.
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