[COM] Armada Arndale (Redevelopment) | $200m

[rhino]

From the Sydney Morning Herald:

Reprieve in Centro battle to shed debt
Danny John and Carolyn Cummins
February 13, 2008

CRIPPLED property group Centro has been given an additional two-month lifeline by its bankers to help it avoid a fire sale of its valuable Australian retailing assets.
Facing a deadline this Friday to put a new re-financing plan in place to reduce its $3.9 billion in debt, Centro will now have until the middle of April to carry out an orderly auction of key parts of its shopping centre portfolio.
Details of the package, said to have been agreed in-principle with its main bankers including ANZ, Commonwealth and National Australia Bank, which are owed $500 million between them, are due to be announced formally on Friday morning.
The deal will take some heat off Centro after its attempts to reduce the cost of servicing its huge debts last month got caught up in the global liquidity crisis.
The crisis resulted in wider shareholder concerns about the complexity of Centro's corporate structure and how much the group was exposed to the finances of various property trusts that had been spun-off from the Australian and US retail centre operator.
Those concerns cost the job of Centro founder and chief executive Andrew Scott, who was forced to resign after a dramatic collapse in both the company's share price and investor confidence in his management.
Mr Scott was replaced four weeks ago by US property executive Glenn Rufrano, who had headed New Plan Excel Realty, which was acquired last May by Centro for $6 billion.
Well known to the American banking and financial community whose concerns about Centro's debt exposure caused lenders to start calling in their loans,
Mr Rufrano has spent the past four weeks negotiating with the group's principal backers to relieve the immediate pressure to sell assets.
Centro, Australia's second-largest shopping centre owner, which also runs 700 centres in the US, is said to have received several indicative offers from major property and investment groups since it opened a data room to handle the sales earlier this month.
Despite its problems, Centro is continuing to receive a highly profitable stream of rental income from its malls which, by and large, are fully occupied and located in major regional cities and towns across NSW, Victoria, Queensland, South Australia and Western Australia.
The aim of the financing lifeline is to give Mr Rufrano more time to extract better offers for the group's assets and to unwind certain joint venture arrangements concerning the ownership and management of dozens of regional shopping malls, most of which are located in the US.
He is also having to untangle the complex links between the main parent company, Centro Properties Group, and its unlisted real estate funds and syndicates.
Centro's shares edged up a cent yesterday to 62 cents following January's price collapse. The debt crisis of the last four weeks has wiped more than $4 billion from the company's market capitalisation. Yesterday it was worth just $516 million.

[AG]

http://www.theaustralian.news.com.au/st ... 58,00.html

Centro rescue package a close call on sealing deal by deadline
Anthony Klan and Turi Condon | February 14, 2008
A RESCUE package will come down to the wire for the beleaguered Centro Properties empire, which is yet to reach final agreement with bankers to extend tomorrow's deadline to repay $3.9 billion in short-term debt.

Centro spokesman Jim Kelly said Centro and Centro Retail Trust had not yet been granted an extension to repay the debt and the group remained locked in discussions with its Australian and US lenders.

"We are obviously hopeful an agreement will be reached but it's not a decision that's in our hands," Mr Kelly said yesterday.

Although the lenders were yet to sign off on an extension, Centro is expected tomorrow to announce its success in securing an extension of at least two months to enable the group to sell assets and avoid receivership.

Centro is trying to sell either the whole group or its half-share in the $4.8 billion Centro Australia Wholesale Fund and its 45per cent stake in the $1.2billion Centro America Fund. The group has chosen a short-list of four parties interested in its stake in the Centro Australia Wholesale Fund. While the sales process of Centro's stake is most advanced, it will be unlikely to announce a winning bidder on that until adviser Lazard Carnegie Wylie has explored other avenues of paying down debt.

Centro is understood to have acted quickly to secure bids on the Australia Wholesale Fund so as to use those bids to strengthen its case with lenders for an extension on its short-term debt.

It is believed Centro initially sought non-binding bids for the Australia Wholesale Fund in the first round of offers.

This would have the likely effect of drawing more, and possibly higher, offers that the group could use to bolster its case for a debt extension.

One bidder on the Australian Wholesale Fund who declined to be named said there was a handful of standout properties with the balance of the 25 centres in Centro's Australian wholesale fund "pedestrian" neighbourhood centres. The deteriorating property market will make it increasingly difficult to sell the Australian wholesale fund's assets at the current book value, he said.

The prize assets are The Galleria in Perth with a book value of $290 million for the fund's half-share, The Glen in Melbourne ($200 million for 50per cent) and Colonnades in Adelaide ($200 million for 50 per cent). The rest of the centres are owned by the listed Centro Retail Trust.

Among those rumoured as potential suitors for the Australian wholesale trust are the acquisitive Industry Superannuation Property Trust, which manages $7.5 billion of industry superannuation fund and Singapore's giant CaptiaLand.

Malaysian conglomerate Mulpha and an unnamed Middle East buyer are among those thought to have some interest the Centro's head stock, Centro Properties Group.

Centro Properties shares closed yesterday at 61c, down 1c. Centro Retail Trust was down 1.5c to 41c.

[Howie]

I've renamed the title to #postponed as there has been no activity in the last 5 weeks on this site. Also with the growing uncertainty as to the future of Centro. Hope this doesn't get canned altogether.

[David C]

Well the "coming soon" banners have been removed around the site.. i guess it was obvious it wouldn't be finished "late 2008"..

Any more news on this? anybody going to buy out Centro?

If Centro goes under would Arndale too?!!

[rhino]

They've had a reprieve - this from today's Australian:

Eddington brokers lifeline for Centro
Maurice Dunlevy | May 09, 2008

THE banks have thrown a seven-month lifeline to the wallowing Centro Properties Group, but the real hero of the temporary rescue has emerged as Melbourne's Mr Fixit, JPMorgan Australia chair Rod Eddington.

Yesterday's $2.75 billion debt extension until December 15 has been credited to 11th-hour intervention by Sir Rod after the Commonwealth Bank refused to sign off on an extension agreement on Wednesday.
With only hours to go before Wednesday's midnight deadline, white knight Sir Rod managed to convince CBA chief executive Ralph Norris to agree to the extension after the bank had earlier baulked at signing on the grounds it was flawed and did not provide adequate security.
According to insiders, it was the CBA that proposed the December 15 extension, rather than one until at least September 30 as requested by Centro.
But CBA's senior bankers didn't like the detail and wouldn't sign. Without their signatures, a temporary seven-day extension -- negotiated by Centro after the debt expired on April 30 -- would have collapsed, almost certainly tipping the shopping centre owner and management group into either administration or receivership.

Enter Sir Rod, the former British Airways boss who, after a quick briefing, was on the telephone to Mr Norris, a former manager of Air New Zealand.
Those negotiations gave the bank a number of concessions, but Sir Rod, knighted by the Blair government in 2006 for his major British transport report and subsequently appointed by the Victorian Government to fix Melbourne's traffic and transport woes, got the CBA's agreement.
Sir Rod was unwilling to talk yesterday about his role in the refinancing deal, which involves Centro providing additional security by way of fixed and floating charges and some US real estate mortgages.
But as chair of JPMorgan, he has more than 2 billion reasons to keep Centro afloat. Centro's main local bankers are ANZ, CBA, National Australia Bank and St George, but JPMorgan has the biggest exposure of all the banks, totalling $2.05 billion.
JPMorgan played a key role in Centro's growth into one of Australia's -- and America's -- largest shopping centre groups.
But while JPMorgan was Centro's closest banker, it was caught off-guard last December when Centro revealed massive funding shortfalls after going on a shopping centre buying spree in the US almost a year earlier.
That aside, Sir Rod might have also felt some empathy for the troubled Centro group.
His directorships include a non-executive role at Allco Finance Group, which has been savaged by the sub-prime crisis.
Yesterday's Centro refinancing agreement is subject to conditions required to be finalised by May 30 and September 30.
In its statement to the Australian Securities Exchange yesterday, Centro also flagged the possibility of selling individual properties in the Centro Australia Wholesale Fund.

[Howie]

From Sept 2008.. up for sale.

http://www.centro.com.au/NR/rdonlyres/8 ... 6Sep08.pdf

Rationale for the Marketing of Centro Arndale for Sale
As part of the 2009 financial year business planning process, Centro MCS reviews
the performance of each of the centres and syndicates within the Centro MCS
portfolio taking into account current market conditions and future potential of each
syndicate and its centres.

The Syndicate’s current LVR of 48% is acceptable; however, the RE considers it
prudent to reduce the debt of the Syndicate and enhance future earnings by reducing
debt servicing costs. If Centro Arndale is sold, we intend to use the majority of
proceeds to reduce debt within the Syndicate.
Sale Process

Centro Arndale is therefore currently being marketed for sale through Jones Lang
LaSalle. The sale campaign is expected to run until mid October 2008. If a
satisfactory sale price is achieved, the sale of the Centre is expected to be finalised
by late December 2008.

[pushbutton]

Well December has come and gone and I they have not announced a sale, so it looks as though no suitable buyer has been found so far.

I assume though they'll keep it on the market until they do find a buyer.

[Port Adelaide Fan]

Tony Clarke to lead Centro's Australian team

CENTRO has reshuffled its senior executive team in Australia to lead the company after it successfully renegotiated debt arrangements.

The Australian team will be led by Tony Clarke, who last week was appointed chief executive for all Centro's Australian operations.

Paul Belcher was appointed general manager - finance, having last served as general manager accounting, Melbourne-based Centro said in a statement on Friday.

Michael Benett (Benett) will now oversee all the funds management business and will also be responsible for corporate marketing and communications.

He was previously manager of the group's business analysis.

Gerard Condon will be in charge of the syndicate funds management while Mark Wilson will be responsible for leasing and property management.

Former chief operating officer Graham Terry and former company secretary Philippa kelly will leave Centro.

In January, Centro succeeded in having due dates on much of its $19.7 billion of debt extended at interest rates equal to or lower than previous arrangements.

In exchange, the company's lenders now hold equity equivalent to 90 per cent of Centro.

http://www.news.com.au/adelaidenow/stor ... 13,00.html

[Port Adelaide Fan]

Arndale revamp back on

A MAJOR overhaul of Arndale Shopping Centre is again on the cards, more than four years after traders were promised an upgrade.

Centro Properties Group has lodged an application with Charles Sturt Council to upgrade the centre.

But the retail giant has refused to provide details about the proposed upgrade until it has been assessed by the council.

Traders last week said an overhaul of the Kilkenny centre was vital for it to compete with other new complexes planned across the west.

Meatworx butcher Craig Barnes said with new shopping centres planned in the west, including the St Clair housing development, Cheltenham, Brickworks Markets and Torrensville, Arndale needed a drawcard to attract customers.

more: http://portside-messenger.whereilive.co ... p-back-on/

[Howie]

Great news! Timing is good with the revitalisation of the woodville/cheltenham area.

[rev]

Excellent, but I hope it's not just a patch up, but an actual full blown redevelopment.

[pushbutton]

Given that the redvelopment was supposed to start in early 2004, and that Centro is still in the early stages of recovery after almost completely collapsing in the GFC, I don't hold out very much hope of this being anything significant, much as I'd like it to be.

[crawf]

What's the Torrensville development?

[Splashmo]

And so I just recently discovered that Arndale is not a suburb!

[Howie]

Nope, it's the name of a uk shopping chain.