TWO years and two days after its spectacular implosion sent the Australian property market into a meltdown, Centro Properties and its satellite Centro Retail have negotiated another round of loan extensions worth $370 million.
The group has managed to keep afloat by extending its $7 billion of debt over the past 18 months. And, despite huge losses, its shopping centres are reporting sales revenue above inflation.
As part of the latest deal, about $45 million of the $370 million will be covered through proceeds from asset sales. The remaining $325 million is to be repaid in two tranches over the next two years. The Centro Retail Trust's (CER) portion of the loan is $155.4 million.
The deal comes as CER moves closer to appointing advisers to work out its formal separation from Centro Properties.
UBS and JPMorgan, the key advisers to Centro in its heyday, have pitched for the separation deal, as has JPMorgan in concert with boutique Moelis & Company.
Citi, Merrill Lynch (with its new team from UBS), Deutsche Bank and Goldman Sachs JBWere are also said to have made proposals.
Centro's chief executive, Glenn Rufrano, who is leaving in February, said the loan repayment involved commercial mortgage-backed securities (CMBS) that had issued $900 million of notes into the market in December 2006.
''The support from noteholders to extend the facilities demonstrates a degree of renewed confidence from the CMBS market in Australian retail property and the quality of centres owned by Centro funds,'' Mr Rufrano said.
''This marks the completion of the major refinancings for CER and the Centro MCS Syndicates for 2009-10. In the case of CER, it has repaid $29.6 million and refinanced $553.9 million of Australian expiring debt since November.''
The deal comes at the end of another tumultuous year for the world's second-largest shopping centre manager by size, in which it reported a combined loss close to $6 billion. It is facing class actions from shareholders over a lack of disclosure about its debt.
At the same time, some of its former directors, Centro's founder, Andrew Scott, and two independent directors, including the chairman, Paul Cooper, are the subject of an Australian Securities and Investment Commission investigation.
Last week, the Federal Court in Victoria was asked to consider an application by lawyers for shareholders to bring direct action against Centro's auditor, PricewaterhouseCoopers.
The group is looking for a successor to Mr Rufrano.
