CENTRO's lenders have not made a move, instead granting the group a seven day extension on all debts which expired yesterday.
This is the third extension following the first two in February and December.
Centro’s $2.3 billion in debt will expire next week, May 07, and gives Centro enough time to finalise discussions with all financiers and the completion of documentation for a longer term extension.
The extension will also cover another $450 million owed in private notes.
In addition, Centro has a $1.29 billion debt facility which is due on September 30.
Centro shares had traded 4.2%, 2 cents lower at 47.5 cents before it was placed on a trading halt. Centro Retail Group was also placed in a trading halt at 48 cents. Both expect to lift the trading halt this Friday.
Centro is currently in negotiations to assets in the $2.6 billion 28 property Centro Australia Wholesale Fund and the $1.1 billion Centro America Fund.
Earlier in the week, analysts JPMorgan’s Rob Stanton said Centro’s true debt position could total $4.9 billion.
And he added that a mere extension granted from the Australian lenders to match US lenders’ September deadlines would not be particularly encouraging in isolation, given Centro’s 81% gearing levels (ex intangibles) are pre a 2008 cap rate expansion reality.
Adding to Centro’s equity concern is the group’s position in the Super LLC, and that Centro had provided the Super LLC lenders with guarantees of $US2.1 billion across the remainder of CNP’s balance sheet.
“This is a position that it is hard to see Centro recovering from as cap rates look more likely to normalise. Centro is already underwater in Super LLC to the tune of $A600 million of equity associated with tangible real estate, and our estimates see that figure rising to $A900 million (albeit some of this loss will be diluted by the non-CNP equity holders in CER),” Stanton concluded.
In total, JPMorgan estimates Centro and CER have $7.4 billion of debt facilities expiring in 2007.
“We see value in Centro equity only as a going concern, however the value could well be taken by any third party to a re-capitalisation,” he added.
Centro’s commentary is backed by sources close to the bid who told Australian Property Journal that the portfolio has garnered a mix reaction.
It is believed there are six properties “standout” assets in the 28 Australian properties CAWF has put up for sale. Meanwhile, CAF comprises interests in 32
It has been reported that Blackstone, Citadel Investment Group, Lighthouse Partners and Macquarie Group have been circling the group’s assets.
Australian Property Journal