The Age: Centro wins breathing space from creditors
Eli Greenblat May 1, 2008
CENTRO Properties Group has won a protracted battle with its creditors to stop them immediately placing the group in the corporate graveyard and may now have until the end of the year to restructure more than $7.4 billion in debt.
An interim extension granted yesterday will expire on Wednesday.
The troubled shopping centre owner and investor could announce early next week a deal to stave off the gang of 16 banks to which it owes money, pushing its debt deadline beyond September and possibly as far out as December.
Centro announced a seven-day interim extension on its debt facilities that had been due to expire last night. The extension gives it time to finalise discussions with all financiers and to complete documentation for a longer extension.
Chief executive Glenn Rufrano was not taking questions yesterday but is expected to emerge from his bunker next week when the company gains final approval from its bankers for the lifeline.
Centro had until the close of business yesterday to repay roughly $4.9 billion in debt, including interest. The company, which owns a string of shopping centres across Australia and the US, owes a further $2.5 billion due to be repaid before the end of the year. Its total debt is $7.4 billion.
Trading in Centro, as well as satellite Centro Retail Group, was halted before the market opened yesterday. When the halt was lifted late in the afternoon, Centro shares fell 2¢ to 45.5¢ and Centro Retail ended unchanged at 48¢.
Centro's lenders include Commonwealth Bank, ANZ, National Australia Bank, Royal Bank of Scotland Group and BNP Paribas.
The company is also continuing to negotiate with a small number of interested parties that might pump much-needed capital into the group or acquire some of its key assets in Australia and the US.
This could include the sale of all or part of its interests in two wholesale funds, Centro Australia Wholesale Fund and Centro America Fund. These have a book worth of $2.3 billion and $800 million, respectively.
But that sale process could be buffeted by the release overnight of key US gross domestic product figures likely to show that the world's biggest economy recorded negative growth in the first quarter of this year, the first stage of a technical recession.
Centro owns shopping centres in the US through its $US5 billion acquisition last year of New Plan Excel Realty Trust, which operates more than 700 shopping malls.
The company had a $1.1 billion net loss for the six months to December, against earnings of $157.3 million a year earlier.
http://www.centro.com.au
CNP Price at posting:
0.0¢ Sentiment: None Disclosure: Held
