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centro shares jump 16 percent...

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    Centro shares jump 16 per cent
    February 18, 2008 10:56am

    SHARES in Centro Properties Group resumed trading today, surging over 16 per cent at the open, after the property group won an extension to refinance $3.9 billion of maturing debt facilities.

    The shopping centre owner said late last Friday night that its financiers in Australia and the US had extended its finance arrangements.

    Investors regained confidence in the firm's outlook, snapping up shares.

    Centro (cnp.ASX:Quote,News) shares rose more than 16 per cent at the open but settled back to be up 6.5 cents, or 10.66 per cent to 67.5 by 10.15am AEDT.

    Shares in its listed trust, Centro Retail Trust, also gained ground, adding 3.5 cents, ot 9.46 per cent, to 40.5 cents.

    The new chief executive Glenn Rufrano, who arrived back in Australia just over a week ago, said the group appreciated the cooperation of its lenders, which will allow sufficient time to complete the review of recapitalisation options.

    "The strategic review is progressing well with a significant number of parties interested in pursuing a recapitalisation of the group,'' he added.

    Centro had until Friday to achieve a refinancing extension to refinance its liabilities.

    The company, which faces refinancing issues due the global credit crisis sparked by the meltdown in the US sub-prime mortgage market, is considering the sale of some of its assets.

    It had encountered trouble after borrowing heavily to pay for acquisitions to spearhead it expansion, especially in the United States.

    Centro is Australia's second largest shopping centre owner, with assets in Australia and the US.

    Debt facilities of $2.3 billion, under Australian arrangements, have been extended until April 30.

    Centro's US private placement noteholders, who are collectively owed $US450 million ($505 million), have agreed to extension arrangements similar to the Australian deal.

    Centro has already flagged the sale of some or all of its assets, including two wholesale funds.

    Mr Rufrano, who was head of the US operations and replaced former chief executive Andrew Scott, said late last month that he was optimistic about achieving the refinancing extension with the company's bankers.

    Shares in Centro have lost about 88 per cent of its market value since mid-December when the firm first flagged its financial problems.

    ABN Amro Morgans Ipswich manger Tony Russell said the extension was a positive for Centro, but added that the firm still had a lot of work to do in the months ahead.

    "This certainly has not got them out of the woods but has added some comfort zone to retie up their debt,'' he said.

    Although the broader market was down, he said Centro should "hold these levels'' on the day.

    "I think the market is willing to take a punt of them,'' he said.


    Cheers, Pie :-)
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