Centro Properties Group, a high-profile Australian victim of the global credit crunch, is selling almost all of the shopping malls in its Centro America Fund for $714 million, using the cash to pay down debt.
Centro shares jumped as much as 35 percent after it said on Tuesday it was selling 29 of the fund's 31 malls to a private real-estate investment adviser which it did not name.
Centro, which owned about 700 U.S. malls before Tuesday's deal, has received several extensions on about A$2.8 billion (US$2.7 billion) in debt which now falls due in December, and is selling assets to help reduce its debt load.
The sale was at a 10 percent discount to the properties' pervious book value, Centro said. On its website, Centro put the value of the Centro America Fund (CAF) assets at about A$1.2 billion.
Centro will continue to provide management and leasing services for the 29 malls for at least a year, maintaining a valuable source of fees.
"The sale of the CAF portfolio is a key step in providing liquidity to our balance sheet," Chief Executive Glenn Rufrano said in a statement.
A spokesman for Centro told Reuters that talks were continuing with potential buyers of another Centro wholesale fund, the Centro Australia Wholesale Fund, with A$2.6 billion in local shopping centre assets.
The group has had to sell assets in a tough market to meet banks' conditions on the loan extensions.
Centro and its affiliate, Centro Retail Trust, borrowed heavily last year to fund a rapid expansion in the United States, but ran into trouble in December when it was unable to refinance maturing debt after credit markets dried up.
Centro holds a 45.1 percent direct stake in CAF, and its managed funds own another 49.9 percent stake.
Centro and its affiliates have a total of some A$5.3 billion in debt which now falls due Dec. 15. Its shares have fallen about 90 percent since it revealed its debt problems.