Source: www.insideretailing.com.auBanks throw a lifeline to...

Source: www.insideretailing.com.au

Banks throw a lifeline to Centro
11:29 AM

Embattled retail property group Centro has been given an additional two-month lifeline by its bankers.

Facing a deadline this Friday to put a new re-financing plan in place to reduce its $3.9 billion in debt, Centro will now have until the middle of April to effect a turnaround.

Observers say a rescue would need to involve the sale of key parts of the group’s huge shopping centre portfolio. This is despite a recent declaration by Centro’s new boss, Glenn Rufrano, that none of the shopping centre assets would be sold.

The deadline extension is said to have been agreed in-principle with Centro’s main bankers including ANZ, Commonwealth and National Australia Bank, which are owed $500 million between them. It is due to be announced formally on Friday morning.

The deal will take some heat off Centro after its attempts to reduce the cost of servicing its huge debts last month got caught up in the global liquidity crisis.

The crisis resulted in wider shareholder concerns about the complexity of Centro's corporate structure and how much the group was exposed to the finances of various property trusts that had been spun-off from the Australian and US retail centre operator.

Centro is Australia's second-largest shopping centre owner after Westfield and also runs 700 centres in the US.


Ends.

Cheers, Pie :-)