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Centro Properties secures lifeline
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By a staff reporter, with Reuters

Centro Properties Group Ltd has secured a lifeline from its bankers, with a one-month extension on all of its facilities part of an agreement in principle to initiate a restructuring plan.

The embattled shopping centre owner has been given a one month interim extension to all of its facilities that expired on December 15 to allow for time for documentation of the re-financing and stabilisation.

Centro has about $2.3 billion of debt and owes a further $A684 million ($US450 million) to private US-based noteholders.

Centro said that no assurance can be given that the documentation will be completed or that the final terms will not be different from those released to the market today.

Centro chairman, Paul Cooper, said the outcome reached with the group's financiers will provide a future for Centro and is a better case scenario than a full-blown collapse.

"The outcome provides a future for Centro and retention of some value for our existing shareholders and is superior to the prospect that Centro otherwise faced of entering administration or liquidation,” Mr Cooper said.

Chief executive, Glenn Rufrano, said the company now has the liquidity and time to maximise the business and pursue an alternative recapitalisation strategy.

"This outcome will stabilise Centro and provide sufficient liquidity with time for the company to maximise the value of its property operating platform and funds management business," Mr Rufrano said.

"This transaction also provides the opportunity to pursue an alternative recapitalisation strategy in a more favourable economic environment," he said.

Mr Rufrano told said Centro was still trying to sell shopping malls in Australia and the United States.

"We will continue to try to transact, and we may have some success," Mr Rufrano said.

The Commonwealth Bank of Australia, owed $1.2 billion, has been a notable opponent to the property group’s proposed plan to swap debt for hybrid equity.

Centro’s temporary retrieve gives some indication that the three-tiered banking syndicate, owed $5 billion by Centro, hopes to salvage some value from the struggling company.

Centro's shopping centres have so far managed to hold their head above the water amid the turmoil and it does have strong underlying assets.

Centro shares were in a trading halt pending the release of the announcement to the market.

The group's shares last traded at 8.7 cents on Friday.