bankers throw centro a lifeline

http://www.businessday.com.au/business/bankers-throw-centro-a-lifeline-20080919-4k7o.html

CENTRO Properties has been thrown a lifeline with confirmation its financiers will support the rollover of debt from the September 30 deadline to the end of the year.

Centro's chief executive, Glenn Rufrano, reassured investors yesterday that, despite the global financial meltdown, his bankers were on side to ensure an orderly sale of assets.

"I have no reason to believe that the extension [from September 30 to December 15] will not be made," Mr Rufrano said.

"It's been one hell of a week for many people. I have friends in New York who work on Wall Street and their heads are spinning. But for us, the percentage that the banks would receive if they put us into receivership and sold the asset would be much lower than if we continued to trade as normal," he said.

As an example, Mr Rufrano said Centro had raised as much as $157.5 million through the sale of a number of shopping centres.

While the cash will not make a dent in its $4 billion debt, with half to be rolled over on September 30, the sale will give the retail landlord's banks some heart that management is committed to trading out of the mire.

As part of the deal, Centro and its associate, Centro Retail Trust, have agreed to sell their 50 per cent stakes in Centro Southport in Queensland for $68 million, at a yield of 7.7 per cent. The price is 9.9 per cent below the June 30 book value of about $75 million.

The buyer was said to be Jonathan Levy, who runs the private Unison Group.

Centro Retail Trust will sell its Meadowlands and Barrington shopping centres in New Zealand for $US49.9 million ($62.1 million), a 1 per cent discount to book value, while the Centro MCS 2 fund has sold Adelaide Central Car Park and Charles Street Plaza for $47 million, a 3.85 per cent discount.