Property group CEC has met the conditions imposed on it by the company’s financiers by reducing debt by $88 million, opening up the opportunity for a long-term debt facility to be renegotiated with its major lender.

The debt reduction target was achieved predominantly through the sale of non-core property and business assets in Cairns and Townsville, according to chief executive Roy Lavis.

The company, “one of the first in Australia to feel the impact of the sub-prime crisis”, was given eight months to reduce its debt from $168 million to $80 million, he said.

“That is without doubt a real challenge for any company to achieve while at the same time not impacting on our operations.”

As part of the debt reduction process, the company has been streamlined in three core areas – civil construction, residential property development and raw materials supply.

“Each of these divisions is profitable now, and we have record amounts of work on our books for the coming 12 months,” Lavis said.

CEC will now work to determine the optimal debt level for the company, with a plan to “put this in front of the financiers by no later than January 29”.