future

This is only my opinion.

AEZ is at risk because it breaches the LVR ratios that are set by the banks.
That being said, at present the banks are not demanding their money back so we donot have any forced sale of any assets.
If there was a forced sale of the assets, the current market is such that the funds realised from such a sale would not lower the LVR. The banks woud be aware of this so are playing ball by not demanding their money back.
This will continue at the discretion of the banks, so long as AEZ income is suffient to pay the all running costs, bank fee's and charges, interest and repay some of the debt.

AEZ has 3 shopping centres which are causing them the most grief. All begin with C and are in Greece, Romania and Spain
That being said these centres have the potential to return the greatest benefit to the company, when property values return to more realistic levels. As pointed out by one of the other posters ...... replacement of these assets could not be done at the prices reflected in the market at present.

From the accounts ....... the repayments and charges for these three are soaking up much of the cash of the company.(see February half year report)
I believe substancial refurbishment and up grades have been done to these centres, with the view that their return in future would be significant ..... I think that decision may have been made pre GFC.

So where to from here?

I believe that the AEZ structure is similar to that of CNP in that all the centres are owned by indivual companies. I understand that all of the loans are taken out by and secured by those indivual companies with the assets of the centres indivually. So if one centre is no longer viable then it can be cut loose without sacrificing all of the assets of AEZ ..... so there is some protection for the greater entity in that.

The European group of financially sound countries will enter into a facility ..... maybe as soon as monday to stabilise Greece. (ABC radio news last night).
That is a plus in my opinion .... hopefully Spain next and then Portugal(my wish list). Where Romania is I donot know as yet.

I believe that AEZ will be a sound investment into the future and that as the European economies recover into the future returns will be good.
Shopping centres are the way of the future in Europe as they are here in Australia and in America. They, as a culture have retained their local shops longer than us but their culture will change and they will embrace the shopping centre culture into the future.
Management will not get itself into this loan breach into the future, they will, as have all businesses, been chasened by the outcomes of the GFC.... I hope. (My opinion)

I believe that if the banking sector and the economies of the indivual countries can be securred then AEZ will be a great investment and I will be accumulating as funds become available ...... depending on price.
ORBIS are not accumulating because they want to loose money .... their investment people are far wiser than me and they must see value.

Again these are only my thoughts and Do Your Own Research as I know nothing (Schultz)

Pottermore