Centro extends discount as bond-holders rush in Maurice Dunlevy | March 26, 2009 Article from: The Australian
CENTRO has extended its early part-payment offer to US bond-holders after a larger-than-expected 80 per cent of them pounced on the opportunity.
The holders of $150 million worth of Centro bonds decided to take their money out of the shopping centre owner early and to accept part-payment, prompted by fears the cash-strapped listed property trust would not be able to pay the money back by the deadline.
Centro's $150 million worth of issued bonds are due for repayment in September, and the property trust is offering to pay 93c in the dollar to those who want their money out early.
Centro has pledged that if the bond-holders wait until the September deadline, they will receive full payment.
The discount offer has now been extended for 10 days.
Centro said it had expected that between 50 and 70 per cent of the bond-holders would accept 93c in the dollar.
But when the original withdrawal deadline was reached on Monday, New York time, 80.21 per cent of outstanding notes, totalling $US120.315 million, had been cashed in.
The response triggered a Centro decision to extend the deadline until 5pm New York time on Friday next week, in the hope more bond-holders will take up the offer. The extension, made by Centro satellite NP LLC, was announced to the Australian stock exchange yesterday.
Centro has been in meltdown since December 2007, when it announced it could not refinance $3.9 billion of maturing debt.
The company is now at the mercy of the banks, with group debts totalling more than $22billion at the end of last year.
The US bond offer is part of a set of Centro debt arrangements in the US. According to Centro, it has financed its 93c in the dollar offer through a combination of asset sales, cash from operations and existing debt facilities.
Meanwhile, details have emerged of combined half-year losses totalling more than $137million for nine Centro MCS property syndicates.
Although most were consolidated in the $2.4 billion half-year loss recently reported by head stock Centro Properties Group, and the $2.06 billion loss by the Centro Retail Trust, individual results for nine syndicates were not known until the release of the half-year results last week.
Only one, Centro MCS 2, turned a profit for the half-year that ended on December 31, albeit a modest $663,000 compared with $3.8 million for the same period the previous year.
The biggest loss of $38.3 million was rung up by the Centro MCS 9 syndicate, which in the previous period turned a profit of $17.6 million.
A further $10.6 million loss was recorded by the associated Centro MCS 9 Unit Trust.
The syndicate is one of Centro's most troubled.
Two shopping centres, one at Hamilton in southwest Victoria, and the other in Cairns, were sold before Christmas to avoid breaches of the loan covenants.
Ends.
Cheers, Pie :)
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