(SYDNEY) Centro Properties Group, the owner of 700 US shopping malls, slumped 76 per cent in Sydney trading.

Hard times: Melbourne-based Centro suspended dividends and said it may have to sell assets after lenders gave it until Feb 15 to renegotiate maturing debt

It said it’s struggling to refinance debt because of the collapse in the US sub-prime housing market.

Melbourne-based Centro suspended dividends and said it may have to sell assets, after lenders gave it until Feb 15 to renegotiate maturing debt.

Traditional sources of funding are ’shut for business,’ chairman Brian Healey said. The share slump wiped A$4.98 billion (S$6.24 billion) from the market value of Centro and Centro Retail Group, the listed real estate investment trust it manages.

A sale of assets threatens to undo chief executive officer Andrew Scott’s US$9 billion expansion into the US, where the company owns the Roosevelt Mall in Philadelphia and Clearwater Mall in Florida. Centro will undertake a strategic review of its business, the company said. Asset sales, new debt facilities and equity injections will all be considered.

Shares of Centro plunged A$4.34 to A$1.36 at the close of trading here yesterday. The stock has declined 85 per cent this year, making it the worst performer on the benchmark index.

More than 120 million shares, or 14 per cent of the stock on issue, changed hands. The listed trust slumped 58 Australian cents to 85 cents. They were the two worst performers on the MSCI’s 1,960-member World Index during Asian trading.

Commonwealth Bank of Australia is Centro’s largest shareholder with a 13 per cent stake.Barclays Global Investors owns a 9.2 per cent stake and Macquarie Group has a 5.8 per cent stake, the data showed. ‘If investors see a company struggling to refinance they don’t want anything to do with them,’ said Angus Gluskie at White Funds Management here.

Centro’s debt rose to 44.1 per cent of assets in fiscal 2007 from 29.8 per cent a year earlier. It has more than A$5 billion in outstanding bonds and loans, according to data compiled by Bloomberg.

Its biggest lenders are Australia & New Zealand Banking Group Ltd, BNP Paribas, Royal Bank of Scotland and Commonwealth Bank, Bloomberg data showed. The company is continuing to negotiate the refinancing of A$1.3 billion of maturing debt, it said yesterday.

Standard & Poor’s yesterday cut the rating on Centro NP LLC, a US real estate investment trust managed by the company, to speculative grade, or junk status. The rating was lowered two levels to BB+. — Bloomberg

Source: Business Times