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January 11, 2008 |
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CENTRO PROPERTIES: Invited by ASIC Regarding AU$1-Billion Debt Four Australian Securities & Investments Commission staff had a locked-in discussion with Centro Properties Group, writes Anthony Klan and Michael West of The Australian. According to The Australian, they overheard in ASIC's foyer, two lawyers from Clayton Utz advising a Centro executive before the ASIC meeting. The Centro representative, states the report, made light-hearted comments to the lawyers about how he believed in taking an optimistic view of unfavorable circumstances. The Australian writes that ASIC is likely to be interested in Centro's failure to properly account for more than AU$1 billion of debt in its June 30 accounts. In those accounts, Centro incorrectly classifies AU$1.097 billion of current debts as "non-current" in a move that masked a AU$450 million funding blackhole that would have showed that Centro was unable to pay its short-term debts, relates The Australian. An analyst interviewed by The Australian expresses that the Commonwealth Bank of Australia, which held AU$600 million first-ranking secured debt and AU$600 million of unsecured debt with Centro, is now understood to be the first Centro lender to have pulled long-term debt funding from the group last month, triggering Centro's debt crisis. Centro Properties Group -- http://www.centro.com.au/ -- is an Australia-based company that comprises the operations of Centro Property Trust (the Trust) and its entities, which are engaged in property investment, property management, property development and funds management. The Company operates in two business segments: property ownership business and services business. The Company derives income from retail property rentals of shopping center space to retailers across Australasia and the United States. It also derives income from its retail property investments in listed and unlisted entities. Its services business activities include incorporating funds management, property management and development and leasing. During the fiscal year ended June 30, 2007, the Company acquired New Plan Excel Realty Trust (New Plan), Heritage Property Investment Trust (Heritage) and Galileo Funds Management, as well as assumed full ownership of its United States management operations. The Troubled Company Reporter-Asia Pacific reported on January 4, 2008, that Standard & Poor's Ratings Services lowered its issuer credit, senior-unsecured debt and preferred stock ratings to 'CCC+' with negative implications reflecting the potential of the group's assets to be sold in softening market conditions, particularly in the U.S. |
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