CNP (ASX) centro halts shares as debt deadline looms...

Source: www.smh.com.au

Centro halts shares as debt deadline looms
April 30, 2008 - 11:33AM

Centro Properties Group, the owner of more than 650 US malls, halted trading in its shares as the company faces a deadline today to extend as much as $5.6 billion in debt.

The company's listed real estate trust, Centro Retail Group, also halted share trades, Melbourne-based Centro Properties said today in a statement to the Australian Stock Exchange.

The mall owner has been trying for more than four months to sell assets and persuade investors and lenders it should retain a collection of malls that stretches from Perth, Western Australia to Yonkers, New York. About 62% of Centro's malls are in the US where its properties lost 8.8% of their value in the six months to December 31 amid slowing retail sales.

Centro's lenders include Commonwealth Bank, ANZ, National Australia Bank, JPMorgan Chase, Royal Bank of Scotland and BNP Paribas.

The company needs to persuade Australian lenders and US noteholders owed $2.8 billion between them to give it more time to pay them back. US and European banks in February gave Centro until the end of September to refinance $2.8 billion in loans owed them, provided Australian banks and the noteholders granted an extension at least as long.

Centro stock has plunged 92% since the company said December 17 it was struggling to repay debt amid the global credit squeeze. The mall owner's market value has shrunk to $401 million from a peak of $8.5 billion in May.

The company posted a record $1.1 billion net loss for the six months to December 31, compared with net income of $157.3 million a year earlier. The company wrote down $578 million on US-based New Plan Excel Realty Trust, purchased last year for $US5.2 billion in the biggest US acquisition by an Australian real estate investment trust.

More than $4 billion was wiped from Centro's value in December after debt markets, including the US commercial mortgage-backed bond market, shut and the company was unable to raise funds. Centro has debt of $17.5 billion, equal to 75.2% of combined debt and equity, it said in February.

Centro gained many of its US malls when it paid cash and assumed debt for New Plan Excel Realty. Glenn Rufrano, who took over as Centro's chief executive officer in December, was head of New Plan at the time of the sale.

Former chief executive Andrew Scott borrowed to buy $US9 billion of malls over two years then spun off the centers into 34 syndicates, three wholesale funds, two unlisted property funds and one listed property fund, which Centro then managed for a fee.

Centro is fighting to retain management rights of some of its property syndicates after Pelorus Property Group approached investors with an offer to reduce fees and boost returns.

Ends.

Cheers, Pie :-)