http://business.theage.com.au/centro-can-be-saved-says-new-ceo/20080124-1nzf.html
Centro can be saved, says new CEO
Glenn Rufrano, Centro's new chief executive, outlines his refinancing ambitions for the property group.
January 25, 2008
GLENN Rufrano, the man charged with turning around the fortunes of the Centro Properties Group, has ruled out a fire sale of assets, confident he can persuade the company's banks to extend a February 15 repayment deadline on $3.9 billion of debt.
In his first media briefing since being appointed to lead Centro in the wake of former chief Andrew Scott's resignation last week, Mr Rufrano admitted the company had a severe credibility problem.
He said Centro, which has lost $4.5 billion of its market value since revealing its refinancing problems to the market on December 17, simply had too much debt that needed to be paid back at a time he described as "the worst" period for debt markets for 20 years.
Mr Rufrano, who has been meeting with Centro's Australian banks - including National Australia Bank, Commonwealth Bank and ANZ - since arriving in Melbourne last week, will fly to the US tomorrow to negotiate with banks and bondholders.
The Australian banks, while not prepared to say publicly, have indicated that they have been in "serious discussions" with Centro to extend the deadline and to work on a new debt-refinancing plan.
Mr Rufrano said the banks could expect to get their money back if "they work with the company".
"We are being open, honest and transparent with them to convince them we are the best managers of their collateral," Mr Rufrano said.
"I have comfort that the banks are not going to put themselves in a position with us that will make it untenable for them and us as long as we're doing our jobs." He also said Centro had allayed the concerns of US bondholders, who last week engaged a law firm to retrieve $US450 million ($522.52 million) in notes, believing Centro was in default.
"We have now restructured their debt and they have all accepted it," he said.
Centro's new boss said the company was trying to raise money through a sale of its stakes in the unlisted Centro Australia Wholesale Fund in Australia as well as the Centro America Fund.
The two funds have a combined $3.7 billion in funds under management.
The company's "equity injection" plan also includes an issue of hybrid equity such as convertible notes.
Mr Rufrano said Centro had already had significant and equal interest in all three options, with the company to open up its books to interested parties for due diligence on Tuesday, a week later than planned.
Centro will also consider any offer for the whole group. But the company is not prepared to sell assets such as The Glen in Melbourne, or Bankstown in Sydney
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