Centro fields expressions of interest on assets Published 1:47�PM,�4�Nov�2010 Last update 6:38�PM,�4�Nov�2010 QUICK SUMMARY | FULL STORY | PROPERTY
By a staff reporter, with AAP
Heavily-indebted Centro Properties Group Ltd says it has received expressions of interest on its proposed recapitalisation and restructure, amid media reports that it is looking to sell its entire $13.5 billion portfolio of assets in Australia and the US.
Cento shares surged 16.66 per cent at the close to 21 cents, against a 0.48 per cent rise in the benchmark index.
Centro said in a statement that it had begun a process to "formally evaluate its Australian and US investments."
"Whilst CER (Centro) has committed to explore a potential sale of all or part of its investments, this does not constitute a requirement by CER to commit to any sale," the company said.
"All proposals will be formally assessed and reviewed by the CER Board and its advisers in the best interests of its security-holders."
Centro chief executive Robert Tsenin said the company had begun testing the market to "evaluate the indicative proposals as well as evaluate other options so as to maximise value for all stakeholders in a flexible manner."
"Any transaction will require approvals and consents at a number of levels.�
But sources told The Australian newspaper that the group had already received formal offers on its portfolio, and its board was expected to make an announcement on the possible sale on Friday.
The Australian Financial Review reported that likely buyers included Colonial First State Global Asset Management, Stockland, Lend Lease, ISPT, QIC and Singapore-based GIC Real Estate.
Stockland managing director Matthrew Quinn confirmed his company's interest in the sale, the newspaper reported.
Aims to lower debt
Mr Tsenin said the primary motive for the restructure was to recapitalise the company and reduce its debt burden.
"I am talking about the company having too much debt and what we are talking is somehow increasing the percentage of equity in the company," Mr Tsenin said in a media call.
"Whether it will be new equity or some debt equity conversion, it is done to increase the component of the percentage of equity in our capital structure."
Mr Tsenin said the need for an injection of capital was driving the process.
"The sooner we can get that done, the better as we do need the capital.
Mr Tsenin said the assets were not going "on the cheap".
"We are not in a fire sales mode. We are doing this as it happens to makes sense," he said.
"Our lenders are not forcing us to do this."
"The markets are improving, both the financial markets and the property markets and we think it is the right time to approaching possible investors and evaluating alternative proposals."
Centro Properties took a hit during the global financial crisis, with the company reporting the valuation for its Australian and US property portfolios declined $1.02 billion in the second half of the 2008/09 financial year.
The pricing of the asset sales would be determined by the market, Mr Tsenin said.
"There may be discounts for some assets for whatever reason," he said.
"On the other hand, you could easily see premiums for other assets."
The company was hopeful the whole restructure and refunding would be completed within a year, Mr Tsenin said.
"Sometime through 2011 we will have reached some appropriate outcome," he said.
No guarantee could be given that any of the options would proceed, Mr Tsenin said.
"In view of CNP's current negative equity position, we do not underestimate the challenge of delivering value to securityholders through this process," Mr Tsenin said.
Securities in Centro Properties closed up two cents, or 12.5 per cent, at 18 cents, while Centro Retail Group finished three cents higher, or 16.67 per cent, at 21 cents on Thursday.
Centro specialises in the ownership, management and development of shopping centres in Australia, New Zealand and the US, as well as managing unlisted investment funds.
CNP Price at posting:
18.0¢ Sentiment: None Disclosure: Held
