centro challenge -cue robert tsenin

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Banker takes on Centro challenge
Florence Chong From: The Australian January 06, 2010 12:00AM
FORMER investment banker Robert Tsenin is stepping into the most challenging job in Australia's property sector by taking charge of the struggling Centro Group.

Centro chairman Paul Cooper yesterday announced the appointment of Mr Tsenin, a non-executive director on the Centro board since last October, to replace Mr Glen Rufrano as Centro group chief executive.

Mr Tsenin will start in February, when Mr Rufrano's contract expires. Mr Tsenin's contract is for three years, and his annual salary will be $1.21 million, to be reviewed annually.

As well, he could receive short-term incentives of up to 150 per cent of his remuneration and long-term cash incentives of $5.5m over three years.

Mr Rufrano, who rescued the group from receivership last year, chose not to renew his contract and will return to the US.

Mr Tsenin said yesterday he had two main priorities: maintaining the company's operational performance and restructuring and recapitalising.

Centro, which owns 733 shopping centres, worth $20 billion, of which two-thirds are located in the US, needs to raise some $8bn to reduce its debt.

Mr Tsenin said Centro had "way too much leverage" and he would work with the advisers to find ways to recapitalise and restructure the group.

"I've worked as an adviser with property and property funds management companies in the past and I hope that experience will be useful in working out options for the group," he said.

Mr Tsenin said recapitalisation could take place in various forms, including assets sales and raising equity either for the parent company or at asset level.

Just before Christmas JPMorgan Chase and the New York-based boutique advisory firm Moelis were appointed to work with Centro on long-term strategies to deal with its debt.

Mr Tsenin has some 30 years experience in the finance and property sector, including serving on the boards of companies such as Telstra and Lazard.

"He's better known as a deal junkie. His main focus will be to restructure Centro and to get it out of its debt problem," said a former chief financial officer, who was himself offered the Centro job, but declined.

A former colleague at Lend Lease said Mr Tsenin was smart enough to get a good team around him. "But Centro's problem is not its underlying properties. The issue is debt," he said.