Centro 'in discussions' with lenders over debt extension AAP November 27, 2008 04:30pm
CENTRO Retail Group chairman Paul Cooper says the listed property trust is continuing discussions with its bankers to get longer-term refinancing extensions for debt facilities.
The facilities related to Super LLC, a joint venture between the trust and Centro Properties Group that was set up to buy the New Plan US property portfolio this year.
"The question of whether the banks will agree to extend their debt agreements with Super LLC needs to be resolved by 15 December," Mr Cooper told security holders at the trust's annual general meeting in Melbourne.
"We are currently in constructive discussions with the lending groups and will make an announcement in regard to the extension as soon as the outcome is known.
"We continue to believe that the best outcome for all stakeholders is for (the trust) to achieve a longer-term debt restructuring and to continue to manage the asset base so that the underlying value of the assets is preserved and debt levels can be reduced."
Centro Retail Trust posted a net loss of $868 million for 2007/08 after booking writedowns on property investments and its investment in Super LLC.
At June 30, it had total debt of $5.1 billion. Some $1.1 billion of debt facilities are subject to the extension agreement negotiations.
Mr Cooper on Thursday said the trust was still working on ways its could become more independent of Centro Properties Group, which holds 51 per cent of Centro Retail Group, and was itself struggling under a debt refinancing burden.
It was "very clear" a board separation between the trust and Centro Properties Group must be achieved.
"The process of achieving independence for (the trust) from Centro is not simple, and it must be understood that (the trust's) immediate future is interlinked with that of the Centro Group, particularly where financing is concerned," Mr Cooper said.
"It is nevertheless important that we position (the trust) to be as independent as possible from the Centro Group as soon as possible."
Chief executive Glenn Rufrano told the meeting that the trust's Australian shopping centre assets were experiencing "very good" occupancy and growth, although sales were expected to moderate due to the economic slowdown.
In the US, the trust was keeping a close eye on its retail tenants, who are facing margin pressure.
"There is clearly pressure on margins and profits, which will negatively affect our occupancies and rent growth," he said.
Centro Retail stapled securities were up 0.2 cents at 8.5 cents.
Ends.
Cheers, Pie :)
CNP Price at posting:
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