Centro survives yet another debt deadline
Centro Properties Group has confirmed that it has reached an in principle agreement with it financiers for an extension of its debt lifeline.
A one month interim extension has been granted over the December 15, 2008, deadline for Centro’s debt to allow time to organise a longer term refinancing.
Centro chief executive Glenn Rufrano said the deal will provide Centro with the liquidity and time to “maximise” the value of its property operating platform and funds management business. Centro is hoping to wait until there is an improvement in the economic environment to look at a recapitalisation strategy.
Centro has $5.05 billion of senior secured debt owed to its Australian lender and US private placement note holders. Of that, $1.05 billion will be converted to senior secured convertible bonds with a seven year maturity date, while the remaining $4 billion will be converted into term loans maturing in December 2011.
No distributions to security holders will be permitted to be paid for the duration of the senior secured debt facility.
The Centro Retail Trust has also reached an in principle agreement with the financiers.
Centro chairman Paul Cooper said the board believes the agreement provides a future for Centro, as well as the “retention of some value for our existing shareholders”.
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