ominous debt deadline looms for centro ...

Source: www.theaustralian.news.com.au

Ominous debt deadline looms for Centro
Katherine Jimenez | December 04, 2008
Article from: The Australian

UNEASE is growing as to whether embattled Centro Properties Group will survive past December 15, as two Australian banks may have toughened their positions.

One banking source said yesterday talk among bankers was that Centro might not survive beyond December 15 -- the date the shopping centre investment group is due to refinance three crucial corporate loan facilities, which are worth more than $4.95 billion.

"The word in banking circles is that it's going to go," he said. "It's looking very difficult."

A separate banking source said there was "still a lot of conversations going on" but "the position of a couple of banks has changed".

Recent media reports say ANZ Bank and NAB have suffered increases in their US dollar-based Centro liabilities because of the collapse in the value of the Australian dollar.

An ANZ spokesman said it did not comment on existing customers. NAB said: "It's a matter for the customer to discuss and we would only discuss any material issues."

A Centro spokesman said: "We continue to be in constructive dialogue with the lenders."

The future of Centro could be settled as early as next week.

It won a three-month reprieve from its US and Australian bankers in September.

Of the local banks, ANZ and Commonwealth Bank have the biggest exposures to Centro -- about $760 million each, on one analyst's numbers.

Another banking source said Commonwealth had hardened its stance on "troubled companies, including Centro".

Centro Property Group's share price closed yesterday at 6.5c, while its satellite, Centro Retail Trust, closed at 8.3c.


Ends.

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