Creditors throw embattled Centro Group a final-hour lifeline ELI GREENBLAT 1st May 2008, 8:15 WST
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 next 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’s debt facilities had been due to expire last night. The sevenday 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 media questions yesterday but is expected to emerge from his bunker next week when the company gains final approval from its bankers for the new lifeline.
It 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 and Centro Retail Group was halted before the market opened yesterday. When the halt was lifted late in the afternoon Centro fell 2¢ to 45.5¢ and Centro Retail ended unchanged at 48¢.
The company is also negotiating with a small number of 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 wholesale funds Centro Australia Wholesale Fund and Centro America Fund. These have a book worth of $2.3 billion and $800 million respectively.
But the sale process could be buffeted by the release overnight of US gross domestic product figures likely to show that the world’s biggest economy was in the first stages of a technical recession.
The company recorded a 2008 first-half net loss of $1.1 billion against earnings of $157.3 million a year earlier.
Ends.
Cheers, Pie :-)
CNP Price at posting:
0.0¢ Sentiment: None Disclosure: Held
