This may seem like a contradiction after yesterday's news about Centro getting an extension. The confusion is a product of Centro's convoluted corporate structure. Yesterday's announcement (the link is below), refers to Centro Retail Properties--a subsidary of parent company Centro Properties Group. Today's announcement covers the parent company.
Australia's Centro Properties Group, the world's fifth-largest shopping-center owner, plans to cede control to its banks after failing to refinance A$5.1 billion ($3.4 billion) of debt accumulated as it acquired 650 U.S. malls.
A stake of as much as 90.1 percent in Centro will be used to pay off some of the debt, according to a statement yesterday. Melbourne-based Centro faces the prospect of collapse if it doesn't finalize terms of the transaction with its bankers within a month, it said.
Centro has struggled to pay its debt after the company spent $9 billion in the two years to May 2007 buying shopping centers in the U.S., which may be in its worst recession since World War II. Centro is part of a wave of Australian corporate collapses that helped destroy A$740 billion of shareholder value this year.
“The outcome provides a future for Centro and retention of some value for our existing shareholders and is superior to the prospect that Centro otherwise faced of entering administration or liquidation,” Chairman Paul Cooper said in the statement.
Past links and stories:
- December 16, 2008, Centro Gets Another Extension
- December 3, 2008, Centro, GGP Find Ways to Hang On
- September 29, 2008, Centro Scores Loan Extension
- September 15, 2008, Centro's Deal Collapses
- September 10, 2008, Centro Cancels Mall Sale
- August 21, 2008, Centro Posts $299M Loss
- July 16, 2008, Centro Clears Minor Hurdle With First Asset Sale
- July 1, 2008, Centro to Sell Five Australian Malls
- May 29, 2008, Report: Centro Close to Big Sale
- May 14, 2008, Centro's Shield
- May 9, 2008, Centro Reaches Debt Agreement, Shares Surge
- April 3, 2008, Centro Takeover Rumors Cause Share Surge
- April 1, 2008, Centro Clears a Hurdle
- Feb. 29, 2008, Report: Blackstone, GE, Mulpha, Mirvac Bidding for Centro.
- Feb. 28, 2008, Centro Shares Surge
- Feb. 15, 2008, Centro Wins Extension
- Jan. 15, 2008, Scott Out, Rufrano In at Centro
- Jan. 10, 2008, Daily Centro Update
- Jan. 9, 2008, UBS Cuts Stake in Centro
- Jan. 3, 2008, Centro: Morgan Stanley, Westfield Have Approached Firm
- Jan. 2, 2008, Centro Says Its Getting Offers
- Dec. 18, 2007, Another Round of Centro Coverage
- Dec. 17, 2007, Centro Hit by Credit Crunch