Centro Properties Posts $1.06 Billion First-Half Loss


Australia's troubled Centro Properties Group said it has received expressions of interest for two of its funds as it seeks to raise cash to repay a heavy debt load, and reported a A$1.1 billion (US$1.06 billion) first-half loss.

The group opened data rooms for its Centro Australia Wholesale Fund and the Centro America Fund last month. "Expressions of interest have been received for both," Centro Chief Executive Glenn Rufrano said in a presentation.

According to its Web site, CAWF is a wholesale fund with 28 Australia and New Zealand shopping centres worth A$2.6 billion, while CAF has 32 U.S. mall assets worth A$1.2 billion. 

Centro said on Friday the first-half loss was partly due to a writedown of U.S. assets.

Australia's second-largest shopping mall owner, had first-half sales of A$255.8 million, up 46% from A$175.2 million a year earlier. 

The Melbourne-based company, one of Australia's biggest casualties of the global credit crunch, has won an extension on a total of A$5.4 billion (US$5.1 billion) in debt till April 30, but is still under pressure to sell assets to raise cash by the new deadline.

Its shares have fallen about 90 percent since it first revealed debt problems in mid-December.

Centro, which owns 700 shopping malls in the United States, got into trouble when it borrowed heavily to expand last year, using short-term debt to finance long-term investments. 

On Thursday, the Wall Street Journal reported at least four companies, including U.S. private equity firm Blackstone Group and a unit of General Electric, were considering bids for a controlling stake in Centro.

Rufrano, who took over as chief executive last month, has identified the group's fundamental problem as simply "too much debt".

JP Morgan analysts told clients in a note on Friday that Centro's debt refinancing workload "is a mountain that still needs to be climbed, made more difficult by its lenders in both the U.S. and Australia having to deal with a growing list of their own problems."