centros us lenders extend debt deadline...

Source: www.bloomberg.com

Centro's U.S. Lenders Extend Debt Deadline to Dec. 15 (Update1)

By Robert Fenner

Sept. 29 (Bloomberg) -- Centro Properties Group and its retail trust gained three-month extensions from their U.S. lenders, giving the Australian shopping mall owner until Dec. 15 to pay back $4.75 billion of borrowings through asset sales.

Centro Retail, the listed investment trust, must repay or refinance $1.1 billion of debt, while the parent has $1.3 billion affected by the deadline change, the Melbourne-based company's said in statements today. Centro already owes A$2.3 billion ($1.9 billion) to Australian creditors by Dec. 15, with $450 million owed to U.S. noteholders.

Australian malls and car parks were sold for A$158.5 million this month, less than a week after a $714 million deal for some U.S. shopping centers collapsed. Centro, which has lost 99 percent of its value in the past 12 months, is struggling to sell assets amid slumping values for its 750 malls stretching from Yonkers New York to Perth, Western Australia.

``Centro has now achieved the first step to better position itself for a longer-term debt restructuring and continues to work with all lending groups in this regard,'' the company said in the statement to the Australian stock exchange.

U.S. lenders for Centro include Bank of America Corp., KeyBank NA, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co. and Wachovia Corp., the Australian Financial Review reported today.

Shares Rise

Centro Properties shares rose 17 percent to 10 Australian cents at 11:27 a.m. in Sydney, giving it a market value of A$85 million, compared with A$8.5 billion in May 2007. Centro Retail gained 15 percent to 15 cents.

The collapse of the U.S. sale, which had been agreed at a 10 percent discount to book value, came less than two weeks after Centro failed to find a buyer for its Bankstown mall in Sydney's western suburbs.

Centro has total group debt of A$17.3 billion and its borrowings are equal to about 73 percent of total assets, the company said in its full-year earnings report published Aug. 29. Centro borrowed in U.S. dollars for about 73 percent of debt.

The value of Centro's U.S. properties fell to $12.8 billion from $13.9 billion a year earlier amid slowing retail sales and a potential recession.


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