Feb. 29 (Bloomberg) -- Centro Properties Group, facing an April 30 deadline on A$4.9 billion ($4.6 billion) of debt, posted a record loss in the first half as the Australian-based company wrote down the value of its more than 670 U.S. shopping malls.
The net loss totaled A$1.1 billion in the six months to Dec. 31, compared with net income of A$157.3 million a year earlier, the Melbourne-based company said today in a statement. The company wrote down A$578 million on U.S.-based New Plan Excel Realty Trust, purchased last year for $5.2 billion.
Centro has been trying for two months to sell stakes in its funds, pay debt and persuade investors and lenders it should retain a collection of malls that stretches from Perth, Western Australia to Yonkers, New York. About 62 percent of Centro's assets are in the U.S. where its properties lost 8.8 percent of their value amid slowing retail sales and a potential recession.
``Valuation decline is a capital markets issue,'' Chief Executive Officer Glenn Rufrano said today in a conference call. ``The dearth of debt capital, lack of transactions and potential consumer spending problems'' in the U.S. have cut the value of malls, he said.
Centro shares fell 9.5 percent to 52 Australian cents at 11:39 a.m. in Sydney trading, valuing the company at A$435 million. The shares have tumbled almost 95 percent from their peak in May last year.
U.S. Acquisitions
Centro gained many of its U.S. malls when it paid cash and assumed debt for New Plan Excel Realty, the biggest U.S. acquisition by an Australian-based real estate investment trust. Rufrano was head of New Plan at the time of the sale.
The company's income distributable to shareholders increased 14.2 percent from the second half to A$185.9 million, or 22 Australian cents per share, after acquisitions increased assets under management. Revenue rose 46 percent to A$255.8 million.
No distribution will be paid in for the period, Centro said today.
``Centro's property-related results show that Centro does not have an operating issue,'' Rufrano said. ``The current issue facing the company is one of capitalization.''
To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net
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