Survival of Centro hangs by a thread Rochfort June 2, 2008
CENTRO Properties Group's chances of survival have taken a serious blow, after the shopping centre owner's bankers failed to agree on the terms of a proposed extension to a $2.3 billion debt facility.
Despite Centro expressing confidence last week that it would be given more breathing space to repay the debt, by late yesterday it was believed the company had still failed to secure an extension to the facility after a key deadline passed on Friday night.
Centro yesterday declined to comment on its discussions with the Australian-based lending group. "There will be an announcement [this] morning," was all its spokesman, Jim Kelly, would say.
It is unclear if the company will also come out of the trading halt in which it was placed last week. Nor have there been any indications whether the banks may stretch the Friday deadline.
In a statement to the stock exchange last month, Centro warned its "further extension arrangements may be terminated" if a deal between its creditors was not finalised by last Friday.
The only thing that may get Centro a reprieve is if it can announce some quick and ready asset sales to appease its creditors. The company owns 800 centres in the US and Australia.
Centro's debt woes largely stem from the acquisition binge undertaken by its former chief executive, Andrew Scott.
Mr Kelly declined to comment on possible consequences of the banks' failure to approve the extension of the debt to December 15, which would have given the company more time to offload some of its shopping centre assets in Australia and the US.
On top of the $2.3 billion debt facility, Centro needs to extend the expiry of $US450 million ($471 million) of US bonds.
Failure to extend the $2.3 billion debt facility is likely to push the company, which owes a further $US1.1 billion to a US lending group, over the edge
CNP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
