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Australia's troubled Centro Properties replaces chief executive
[January 14, 2008]

Australia's troubled Centro Properties replaces chief executive

(Associated Press WorldStream Via Thomson Dialog NewsEdge) MELBOURNE, Australia_Centro Properties Group replaced its chief executive Tuesday as it struggles to refinance billions of dollars in debt because of the global credit crisis.

Centro named Glenn Rufrano, the head of its U.S. unit, as an immediate replacement for Andrew Scott, who had resigned as chief executive.

The Australian company, which is a large owner of shopping malls in the United Sates and Britain as well as at home, also defended itself against allegations it may have defaulted on some of its U.S. debt.

Centro said in a statement to the Australian Securities Exchange that it may have underestimated its current liabilities and will open its books on some of its major assets to a number of potential investors as it works to resolve its debt crisis.

But Centro said it had not concluded that the company had defaulted on any debt, as some U.S. lenders were claiming.

The company flagged the potential sale of its interests in the Centro Australia Wholesale Fund and Centro America Fund, which hold 3.7 billion Australian dollars (US$3.3 billion; ?2.2 billion) of assets.

Still, Centro has made little progress in a plan to refinance A$3.9 billion (US$3.5 billion; ?2.35 billion) in maturing debt by Feb. 15.

The heavily indebted property trust is the Asia-Pacific's worst casualty of the global credit crunch triggered by the U.S. subprime crisis and has led to a wider sell-off in Australia's property trust sector.

The company risks insolvency if it fails to roll over its debt or maintain the support of its lenders, which include domestic and foreign banks, such as Royal Bank of Scotland, BNP Paribas and JPMorgan Chase and Co.

Tuesday's statement ended a two-day trading halt in Centro shares, and their price slumped sharply after the announcement. After about two hours' trading, Centro shares were down 25 percent to A$0.64, while stock in Centro Retail Group, a property fund managed by Centro Properties, was down 35 percent to A$0.38 cents.

Centro Property's share has plunged more than 90 percent since trading at A$10.02 in May.

Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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