Centro Properties Group has reached an in-principle agreement with its financiers to achieve long-term refinancing and stability.
Centro Properties Group (Centro) securities advanced yesterday after it reached an in-principle agreement with its financiers to achieve long-term refinancing and stability.
The shopping mall owner's securities had gained 26.44 per cent to 11 cents by the end of trading.
"The outcome provides a future for Centro and retention of some value for our existing shareholders and is superior to the prospect that Centro otherwise faces of entering administration or liquidation," Centro chairman Paul Cooper said.
Under the agreement, Centro received a one-month interim extension on the facilities which were due on December 15, 2008.
Of the $5.05 billion senior secured debt owed to Australian lenders and US private placement noteholders, Centro said $1.05 billion will be replaced by hybrid securities and $4 billion will be converted into term debt loans.
These hybrid securities will have a seven-year maturity date, but they have the potential to be converted into ordinary stapled securities under certain undisclosed conditions.
Centro will also issue 14.9 per cent of existing issued securities to Australian lenders and the US noteholders on or before January 15, 2009.
Owning those issued securities, along with the hybrid securities should they be fully converted, will give Centro's financiers a 90.1 per cent stake in the company.
Centro said it also has access to a $35 million revolving working capital facility, which will allow it to meet day-to-day obligations.
No distributions to ordinary securityholders are permitted to be paid for the duration of the senior secured debt facility, and it is unlikely that distributions would be paid prior to the conversion of hybrid securities, Centro said.
In Part 2 of our exclusive series, we ask leading names to nominate their best investments, the most effective industry group and the importance of platforms.
Colonial switches managers »
Wealth management group Colonial First State has terminated Pengana and GMO from its FirstChoice platform.
Funds sell hotel to Malaysian firm »
Malaysian-listed company TA Enterprise Bhd has bought the Westin Melbourne Hotel for $160 million from a group of industry funds.
