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centros shares jump on funding deal...

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    UPDATE 1-Australia's Centro shares jump on funding deal
    Sun Feb 17, 2008 6:55pm EST

    (Adds analyst comment, details of debt)

    MELBOURNE, Feb 18 (Reuters) - Shares in Centro Properties Group (CNP.AX: Quote, Profile, Research), a victim of the subprime mortgage crisis, jumped as much as 14 percent on Monday after the company said it had won a two-month reprieve from its lenders on a total of A$5.4 billion ($4.8 billion) of debt.

    Its shares were up 11.5 percent at A$0.68, after hitting an early peak of A$0.695, but are still down almost 90 percent since it revealed in December it was having trouble repaying debt.

    "It's almost impossible to quantify what the equity in this business is worth," said ING Investment Management portfolio manager Justin Blaess. He said the stock was stock dominated by day traders rather than long-term investors.

    The company late on Friday confirmed its current liabilities are about A$1.5 billion higher than previously stated, saying the portion of debt had been incorrectly classified as non-current. Centro had flagged the reclassification last month.

    Centro, owner of 700 U.S. shopping malls and one of Australia's biggest casualties of the global credit crunch, got into trouble when it borrowed heavily using short-term debt to finance long-term investments.

    "When you look around at the wider world, there's financial disasters happening everywhere. Credit markets are still under siege. We don't want to take financial risk in that sort of market," said Blaess, explaining why ING no longer holds Centro.

    Centro and its affiliates had faced a Friday deadline to extend refinancing, giving the company more time to sell assets to raise cash and repay its debts. The banks have given it until April 30.

    It is conducting a review to sell off assets or the entire group, with local media reports putting Blackstone and Citadel investment groups, property developer Mirvac Group (MBR.AX: Quote, Profile, Research) and Macquarie Group Ltd MQG.AX among the interested parties.

    Centro renegotiated A$2.3 billion of debt with its Australian banks, A$1.4 billion associated with its U.S. joint venture with the Centro Retail Trust (CER.AX: Quote, Profile, Research), and $450 million owed to U.S. private noteholders.

    In addition, its affiliate Centro Retail Trust said on Friday it had received an extension on A$1.2 billion of debt.

    Centro Retail shares rose 6.7 percent to A$0.395.

    Centro's main local bankers are Australia and New Zealand Banking Group Ltd (ANZ.AX: Quote, Profile, Research), Commonwealth Bank of Australia Ltd (CBA.AX: Quote, Profile, Research) (CBA), National Australia Bank Ltd (NAB.AX: Quote, Profile, Research) and St George Bank Ltd (SGB.AX: Quote, Profile, Research). It also has U.S. bank creditors including JP Morgan (JPM.N: Quote, Profile, Research) and Bank of America (BAC.N: Quote, Profile, Research) and private noteholders who are owed $450 million. ($1=A$1.10) (Reporting by Victoria Thieberger; Editing by James Thornhill)


    Cheers, Pie :-)
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