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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 quit as chief executive Tuesday, the company said in a statement to the Australian Securities Exchange. 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 separate statement to the 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 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. Centro shares closed more than 30 percent lower at A$0.60, while stock in Centro Retail Group, a property fund managed by Centro Properties, was down more than 44 percent to A$0.32. Centro Property's share has plunged more than 90 percent since trading at A$10.02 in May. Maxim Asset Management analyst Winston Sammut said Scott's replacement shows Centro's lenders are in control of the company, and that the choice of Rufrano as his replacement shows they want an executive with more knowledge of Centro's U.S. exposure and U.S. assets. Centro incurred the debt during an aggressive spending spree in the past two years to become the fifth-largest U.S. shopping mall owner, boosting funds under management to A$26.6 billion at June 30 from A$9.9 billion in January 2006. About two-thirds of Centro's 810 properties are in the U.S. In addition to the short-term debt Centro must refinance, the company also will have to roll over A$4 billion of debt within the next 12 months and a further A$10 billion in debt after December 2008. "Centro was far too ambitious and far too complacent about debt management," said Andrew Parsons, a fund manager at Resolution Capital. "Should it survive it'll be a very different vehicle and a lot of that will depend on the state of the U.S. retail market." Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |