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Brokers believe Centro Property Group will ride out its credit crunch woes and that its securities could rebound to within the A$2 ($2.30) range.
Australia's second-largest owner of shopping centres went into a tailspin midway through December when it was unable to refinance about $1.3 billion of maturing
debt.
The company was nearly annihilated by investors selling out - losing more than four-fifths of its market capitalisation - after warning that it was struggling to refinance A$1.1 billion ($1.3 billion) in debt. Centro has until February 15 to renegotiate the debt, which is related to its A$6.2 billion acquisition of US shopping centre owner New Plan Excel. Centro bought the real estate investment trust when shares were near their peak.
Since then, Centro securities have stabilised around the A$1-A$1.10 range and on Wednesday it announced it had received unsolicited approaches from parties wishing to invest in the group or buy up some of its assets. In response, Centro said it was open to offers that maximised the interests of its security holders.
Centro Properties has big malls in Auckland, Wellington and Christchurch, and has been one of the largest mall buyers in New Zealand this decade, snapping up a string of centres for many millions of dollars.
Until the recent disclosure that Centro will either have to sell assets, raise new equity or both, it was being reported as a possible buyer for Westfield's malls at Glenfield and Pakuranga.
Centro's largest NZ mall is the 17,995sq m Porirua MegaCentre near Wellington. In 2003, Centro bought this bulky goods complex with parking for 600 cars, giving it a large stake in the capital's real estate and retail fortunes.
In 2003, MCS Property, part of the Centro Group, bought the 9825sq m Kelston Shopping Centre in Auckland. This neighbourhood centre with parking for 408 vehicles was redeveloped in 1996 and has a Foodtown supermarket, McDonald's, Mobil service station and 20 shops.
Also in Auckland, Centro Retail Trust owns Meadowlands Shopping Centre on Whitford St in Howick.
In 2005, Centro paid Auckland investor Sudesh Jhunjhunwala $12.5 million for this centre.
Centro Retail Trust owns the Barrington Shopping Centre in Christchurch. This 11,573sq m centre has a Warehouse, 32 shops and a large supermarket.
Aequs Securities institutional dealer Ric Klusman said there was now a lot of chatter in the market about either financial institutions or rival shopping centre operators buying in.
"The rumour is that they are talking to Westfield," Klusman said.
"Westfield sold them a lot of assets and whether Westfield wants to buy them back or not, I think they will now ride through this, this is different to the RAMS situation."
Share buying was fuelled partly by media reports that US hedge funds Blackstone and Citadel had flown teams to Australia to participate in the Centro sale.
- AAP
