CENTRO Properties Group tumbled today after it warned a stabilisation plan might devalue its already battered securities.
The debt-laden shopping centre owner, which has been hit hard by the global credit crunch, also said its plan to recapitalise the company would not be satisfied by asset sales alone.
And Centro (ASX: CNP) said in the absence of a short-term recapitalisation solution it would seek to obtain longer-term debt extensions from its bankers beyond December 15.
“The group has commenced discussions with the lender groups on possible terms for longer term debt extension and stabilisation of the group,” Centro said.
“It is likely that those terms would include a requirement for the conversion of a portion of debt into some form of hybrid security.
“This may impact the value of the group's existing ordinary equity.”
Stapled securities of Centro were down 2 cents, or 9 per cent, at 20 cents by late morning in a stronger market overall. The company’s market value has fallen about 80 per cent this year.
It is still in talks with a number of possible buyers of some assets from its Centro Australia Wholesale fund. In the United States it has already sold $US195 million ($226 million) in assets and has a conditional contract for the sale of its Centro American portfolio for $US714 million.
The extension for debt held by its US lenders, totalling $US1.1 billion, expires on September 30.
On the December 15 deadline, Centro's domestic lenders are owed $2.3 billion and its US private placement debt holders are owed $US450 million.
CNP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
