Cen­tro sale

Townsville Bulletin - - Investor -

T HE d e b t - l a d e n Ce n t r o Prop­er­ties Group will sell all of its United States as­sets and ex­change its Aus­tralian as­sets in or­der to can­cel its debt.

T h e s h o p p i n g c e n t r e owner is one of Aus­tralia’s high­est pro­file ca­su­al­ties of the global fi­nan­cial cri­sis, post­ing bil­lion dol­lar losses and strug­gling to meet debt re­pay­ments as prop­erty val­ues plunged.

Cen­tro and its man­aged funds will sell the US port­fo­lio of about 600 shop­ping cen­tres to BRE Re­tail Hold­ings Inc, an af­fil­i­ate of Black­stone Real Es­tate Part­ners, for $ 9.24 bil­lion.

Cen­tro will re­ceive pro­ceeds of $ 600 mil­lion from the deal, af­ter re­pay­ing un­der­ly­ing prop­erty debt, while Cen­tro Re­tail Trust will re­ceive $ 500 mil­lion.

Cen­tro Re­tail will use the pro­ceeds to pay down its Aus­tralian prop­erty debt, and fore­casts its gear­ing to fall from 75 per cent to 43 per cent.

Along­side the US as­set sale, Cen­tro has out­lined its l ong-awaited re­struc­ture plans.

This in­volves the can­cel­la­tion of Cen­tro’s se­nior debt in ex­change for its Aus­tralian as­sets, and the amal­ga­ma­tion of its funds’ as­sets into one port­fo­lio.

The hold­ers of about 73 per cent of Cen­tro’s se­nior debt have also agreed to make $ 100 mil­lion avail­able to Cen­tro stake­hold­ers and s e c u r i t y h o l d e r s i n ex­change for the debt can­cel­la­tion.



ex­ec­u­tive Robert Ts­enin said the dis­tri­bu­tion of those funds would prove dif­fi­cult.

‘‘ The $ 100 mil­lion is go­ing to be made avail­able for a va­ri­ety of stake­hold­ers, not just our share­hold­ers,’’ he told jour­nal­ists.

‘‘ The process the board will have to un­der­take is go­ing to be quite dif­fi­cult and will be un­der­taken with a great deal of care to work out an ap­pro­pri­ate way of di­vid­ing that among the var­i­ous stake­hold­ers.’’

T h e d e b t c a n c e l l a t i o n plans were in their early stages, with no cer­tainty of the plan pro­gress­ing, Mr Ts­enin said.

Along with stake­holder ap­proval, it is con­tin­gent on the pro­posed amal­ga­ma­tion of the as­sets of Cen­tro man­aged funds.

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