June 10 (Bloomberg) -- Centro Properties Group is planning to sell its syndicates management business, which controls A$3.2 billion ($2.7 billion) of Australian shopping malls, the Australian newspaper reported.
Centro has approached property trust Charter Hall Group, before starting a formal campaign, the newspaper said, citing industry sources it didn't identify.
Potential buyers for its Australian syndicate platform include Colonial First State Global Asset Management, AMP Ltd., Challenger Financial Services Group Ltd., Lend Lease Group and GPT Group, according to the report.
Centro, which owns more than 600 malls in the U.S., reached agreements with its creditors to restructure assets in December 2008.
Advisers to Centro are believed to have put up plans to separate the Australian and U.S. business, the report said. JPMorgan Chase & Co. and Moelis & Co. were appointed by Centro in December to advise on a restructuring, and UBS AG is advising the retail property management arm Centro Retail Trust.
"The assessment of a restructure that was announced in December 2009 is ongoing," Centro spokesman Andrew Scannell said in an e-mail today, declining to say whether a sale was a possibility or if Centro would prefer to take on a partner.
Centro Property shares were unchanged at 17.5 Australian cents at 10:53 a.m. in Sydney. Centro Retail shares dropped 2.5 percent to 20 Australian cents.
The group posted a A$3.5 billion loss last year. Former Centro Chief Executive Officer Andrew Scott borrowed to buy $9 billion of malls during 2006 and 2007, then spun off the centers into various syndicates, listed and unlisted property funds. The company now has two listed property funds, 34 direct property syndicates, three wholesale funds, and two unlisted property funds, which it manages for a fee, it said on its website.
The Melbourne-based company announced a revision to its fiscal 2010 operating result forecast, saying it will be up to 35 percent less than the same period last year, from its previous estimate of a 45 percent decline, on lower-than- expected interest rates in the U.S.
It said in March it is selling its A$202 million Surfers Paradise mall on Queensland state's Gold Coast after failing to attract investors to replace those withdrawing funds from the unlisted syndicate that owned the property.
The group may have to sell more than A$1 billion of centers as investors exit syndicates due to expire in the next 18 months, the Australian report said.
