TROUBLED shopping centres owner and manager Centro Properties Group has extended the tenure of its chief executive by at least another year.
Glenn Rufrano's appointment was extended for 12 months, effective March 1, and was subject to further automatic 12-month extensions, it said in a statement yesterday. Mr Rufrano will be based at Centro's US headquarters in New York from April and be in the corporate office in Melbourne as required.
Mr Rufrano was appointed CEO on January 15, 2008, after the debt-laden group became one of the highest-profile victims of the global credit crunch that swept through global financial markets in late 2007.
Its difficulty in refinancing debt securities in tight credit markets casts doubt on its sustainability and now the group is selling assets to pay down its liabilities.
Centro said Mr Rufrano would continue to receive a salary of $US1.2 million ($A1.86 million) a year and be entitled to long and short-term performance-based incentives.
Meanwhile, Centro Retail Trust, a retail property ownership vehicle 51 per cent owned by Centro Property, yesterday reported a $2.06 billion loss for the first half of 2008-09.
Excluding non-recurring and non-cash items, profit from underlying operations was $89 million.
The non-cash items included mark-to-market losses on foreign exchange and interest rate swaps of $1.154 billion, $760 million in property revaluations and a $230 million impairment related to the trust's interest in Super LLC. Super LLC is a joint venture between Centro Properties and the trust and covers shopping centres in the US. The trust has an interest in 441 properties valued at $9.9 billion.
Its portfolio, both in Australia and the US, is dominated by supermarkets. But the trust also has high debt and at January 16 had about $1.5 billion of liabilities due to expire in calendar 2009 and another $2.1 billion due by the end of 2010.
"In light of the debt refinancing that needs to be completed over the next 12 to 24 months, Centro Retail Trust will focus on extending the maturity profile of its debt facilities and, where possible, utilising available cash to reduce debt," it said.
Mr Rufrano said the goal was to reduce the trust's loan-to-value ratio of 69 per cent. "Debt reduction throughout this year is estimated to approximate $550 million through asset sales and operating cash flow," he said. "Until we reach appropriate debt levels, with unrestricted cash flow, we will not be able to articulate and implement a sustainable distribution policy."
Centro Retail Trust's $2.06 billion loss for the six months to December 31 compares with a $260.80 million loss in the previous corresponding period. It did not declare an interim distribution and said it was not providing distribution guidance at this time.
Its stapled securities closed down 0.2¢ at 4.2¢. This time last year, the trust's securities were trading at about 37¢.
Centro Property reports its interim results on Thursday.
