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Source: www.bloomberg.com

Centro's U.S. Mall Manager Posts $299 Million Loss (Update1)
By Laura Cochrane

Aug. 20 (Bloomberg) -- Centro Properties Group, the Australian owner of more than 650 U.S. malls, said the unit that manages U.S. assets acquired last year for $5.2 billion posted a second-quarter loss after writing down the value of the business.

Centro NP had a net loss of $299 million for the three months ended June 30, the Melbourne-based parent said today in a statement to the Australian stock exchange. The unit booked a $95 million charge for writing down properties and a $173.5 million impairment in the company's goodwill and the value of its property management business.

``There is substantial doubt about the company's ability to continue as a going concern given that the company's liquidity is subject to, among other things, its ability to negotiate extensions of credit facilities,'' Centro NP said in a statement filed yesterday with the U.S. Securities and Exchange Commission.

Centro Properties' market value plunged in December when the seizure in global credit market shut funding avenues for the company and it was unable to repay borrowing used to buy New Plan. It has since won five reprieves from lenders on repayments for as much as A$6.6 billion ($5.8 billion) in debt.

Centro's U.S. properties lost 8.8 percent of their value amid slowing retail sales and a potential recession, according to the parent company's first-half earnings report. It also has 129 shopping centers in Australia and New Zealand and is trying to sell stakes in its funds to repay debt.

Centro NP generated net income of $4 million in the period from April 5 to June 30, 2007, according to its statement. April 5 was the date the U.S. unit was created out of Centro's acquisition of New Plan Excel Realty, the biggest U.S. acquisition by an Australian real estate investment trust. Centro NP has $4.5 billion of real estate assets, according to its second-quarter earnings.

Centro Property shares fell 2.1 percent to 23.5 Australian cents as of 10:55 a.m., valuing the company at A$199 million. The stock has dropped 97 percent in the past year.


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