Crucial cut-off for Centro Carolyn Cummins May 30, 2008
CENTRO PROPERTIES has until the close of business tonight to persuade its bankers to extend the deadline for its $4.9 billion of debt or face the appointment of an administrator.
Giving weight to the importance of today's cut-off is the fact that representatives of all of the group's US and European bankers and bond holders arrived in Melbourne this week, and have been locked in heated discussions with Centro's management and its local financiers.
It is understood many of them attended the Federal Court hearing on Tuesday concerning two class actions which could be worth upwards of $1 billion.
"It still seems unlikely, despite reports of serious disputes between the bankers, that they will ultimately let Centro go under," one analyst told the Herald.
"There is no harmony between the bankers. Although it would appear they are happy for Glenn Rufrano, Centro's chief executive, to call the shots and run the business in preparation for sales of assets."
By tonight Centro must have finalised a $155 million liquidity facility and given its creditors concrete evidence it is raising the much-needed cash. That demand was made on May 9 and if all conditions are met then Centro has breathing space until December 15.
Reports are circulating among retail investors that the group is close to selling its Centro America Fund, worth close to $1 billion, to a US-based private equity group, and is close to exchanging contracts on 10 shopping centres in Australia.
Last night, sources who declined to be named said that the US bankers were mostly secured and had been at the meetings to get some guarantees they would be paid at their cut-off date of September 30.
In the expectation of a positive resolution, Centro's price jumped 3c yesterday to 38c.
Ends.
Cheers, Pie :)
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