The asset sale Centro announced one month ago has seemingly collapsed. This pushes the firm even closer to the brink.
Centro's chief executive, Glenn Rufrano, said yesterday that talks had been terminated with the private US pension fund that signed a contingent agreement on July 15 for the purchase of the Centro America Fund portfolio."The agreement was subject to certain closing conditions, including a due diligence period and lender consent," Mr Rufrano said. "Centro now advises that the due diligence period has expired and the purchaser has elected to terminate the agreement." He said that despite this, discussions were continuing, albeit that no assurance could be given that they would lead to an agreement.
Centro says it still has the support of its banker and financiers. A Goldman Sachs JBWere analyst, David Lloyd, said that while the termination of the agreement was an obvious setback for Centro in its attempts to recapitalise the business "asset sales alone will not be enough to keep Centro as a going concern".
"Although asset sales will enable some debt to be paid, Centro's future is dependent upon a significant equity injection, most likely through a hybrid instrument.
"With this unlikely to occur before calendar year-end, Centro will likely remain at the mercy of its lenders," Mr Lloyd said.
Past stories:
- September 10, 2008, Centro Cancels Mall Sale
- August 21, 2008, Centro Posts $299M Loss
- July 16, 2008, Centro Clears Minor Hurdle With First Asset Sale
- July 1, 2008, Centro to Sell Five Australian Malls
- May 29, 2008, Report: Centro Close to Big Sale
- May 14, 2008, Centro's Shield
- May 9, 2008, Centro Reaches Debt Agreement, Shares Surge
- April 3, 2008, Centro Takeover Rumors Cause Share Surge
- April 1, 2008, Centro Clears a Hurdle
- Feb. 29, 2008, Report: Blackstone, GE, Mulpha, Mirvac Bidding for Centro.
- Feb. 28, 2008, Centro Shares Surge
- Feb. 15, 2008, Centro Wins Extension
- Jan. 15, 2008, Scott Out, Rufrano In at Centro
- Jan. 10, 2008, Daily Centro Update
- Jan. 9, 2008, UBS Cuts Stake in Centro
- Jan. 3, 2008, Centro: Morgan Stanley, Westfield Have Approached Firm
- Jan. 2, 2008, Centro Says Its Getting Offers
- Dec. 18, 2007, Another Round of Centro Coverage
- Dec. 17, 2007, Centro Hit by Credit Crunch