No risk for Toormina Centro


CENTRO Properties says the redevelopment of the Toormina shopping centre is unlikely to be affected by the financial troubles afflicting the company.

Centro Properties Group, Australia's second largest shopping centre owner has become the biggest Australian victim of the global credit crunch.

The massive property group, which is highly geared following the acquisition of a number of properties in the USA, is having unexpected problems refinancing $1.3 billion worth of maturing debt.

A spokesman for Centro Properties said yesterday that because the Toormina centre was already in the middle of the multi-million dollar redevelopment, he could not imagine that that the company's global financing problems would have any effect on the work.

He said there would be 'no impact whatsoever' on the operation and management of Centro Toormina.

But he said planned capital expenditure projects were likely to be affected.

The spokesman said the Group had to give its banking syndicate a plan on repaying debt by February 15.

But investment analysts are warning banks will remain reluctant to lend unless Centro sells assets to reduce its debt level.

Centro CEO Andrew Scott said selling some of its newly acquired US companies would be part of the strategic review being undertaken by the Centro board.

Shares in the Group dropped from $4.43 to $1.36, stripping $3.67 billion off the value of the company following the news the expected credit providers would not provide long-term refinancing.

The news sparked panic in the property sector, with investors dumping other listed trusts and investment funds because of concerns they too would struggle to refinance debt in volatile credit markets.

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