Centro pulls Bankstown centre from sale Email Print Normal font Large font AdvertisementCarolyn Cummins Commercial Property Editor September 10, 2008
CENTRO Properties says the decision to withdraw its $600 million Centro Bankstown shopping centre from sale will not have a negative effect on its recapitalisation program.
The mall is half-owned by the syndicate Centro MCS 28 and Centro Retail Trust. Centro Properties is the manager.
Centro has until September 30 to convince its US lenders to extend their debt deadline to December 15, aligning it with that of the group's Australian banks. It is thought the management of the retail landlord is quietly confident it will get its extension.
But should any of the banks in the syndicate opt for immediate cash, Centro will go into administration and a fire sale of assets will occur.
Centro's chief executive, Glenn Rufrano, told the Herald yesterday: "The syndicate business is separate to the Centro headstock. The money raised from any asset sale goes to repay debt [in the syndicate] and then to syndicate investors.
"Centro Properties stands alongside all other investors in this regard. Centro MCS syndicates are a separate businesses and are not directly related to the headstock financing or recapitalisation."
A spokesman added that it was "a difficult market and we will be patient to make sure we get the best possible outcome for our stakeholders. With the continued support of our banks, we are not distressed sellers."
Mr Rufrano said he was in the midst of a program of meetings with the syndicate and other unlisted investors, and so far the feedback had been positive.
While there were buyers for assets under $50 million, he said, buyers were finding it hard to arrange financing for shopping centres valued at more than $600 million.
In a letter to investors in the Centro MCS 28 syndicate last week, Centro's general manager for syndicated funds management, Gerard Condon, said: "No satisfactory offers were received and therefore the syndicate's interest in the property will not be sold at this time."
The other half-owner of Centro Bankstown, which has just been refurbished, is Centro Retail Trust.
The JP Morgan property analyst Rob Stanton said in a note last week - after Centro reported a bottom-line loss of $2 billion for the 2007-08 financial year - that in an environment where asset sales were slow due to bidder reluctance or a lack of capital, it needed to be asked if the banks wanted to own Centro assets.
"We continue to think not. Centro's operational team has a good handle on the underlying nuts-and-bolts business of running shopping centres, and the new management appear to have a good understanding of the banks' needs. So Centro gives the appearance of being in an extended work-out," he said.
Centro shares fell 1.5c, to 13.5c.
CNP Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
