Australia's Centro restructuring wins approval

MELBOURNE (Nov 22): Australia's Centro Properties won investors' support on Tuesday for its restructuring plan to create a new A$3.4 billion (RM10.68 billion) listed property trust, thus avoiding collapse under a heavy debt load.

Australia's second-largest shopping mall owner had said previously that if the new structure was rejected, the group could become insolvent because it could not repay A$2.9 billion in debt maturing Dec 15.

The final tally included votes by shareholders in Centro, its affiliate Centro Retail Group, senior lenders and convertible bond holders, at a series of meetings that lasted all day.

Centro, which was hit by the global credit crisis in late 2007, said under the restructuring, senior debt holders would cancel the bulk of senior debt in return for "substantially all" of Centro's Australian assets and interests.

The restructure will merge the group's several funds and syndicates and included the sale of assets from Centro Properties to Centro Retail.

Centro last week made last-minute changes to the proposal to solicit more support from shareholders of Centro Retail, offering them a bigger stake in the new trust.

The sweetened offer also gave a better deal to compensate for any potential litigation payouts from an ongoing class action litigation against Centro Retail.

PriceWaterhouseCoopers had sought to stop the shareholder votes because of the lawsuit, but a state court ruled the vote could go ahead.

Shares of Centro Retail jumped 24% on Monday before the stock was placed in a trading halt on Tuesday pending the outcome of the shareholder meetings.

Centro said the restructure still needs court approval, scheduled for Thursday.

The new vehicle is expected to have a net asset value of A$3.4 billion, or A$2.50 per security, and a gearing of around 41% with a forecast statutory distribution per security of 6.4 Australian cents for the second half of fiscal 2012.

Centro Properties sold nearly 600 US shopping malls to private equity firm Blackstone Group LP this year for US$9.4 billion (RM29.91 billion), one of the biggest global property deals since the credit crisis, leaving it with mainly Australian assets. — Reuters