BREAKFAST DEALS: Centro awakesSupratim AdhikariPublished 7:36...

BREAKFAST DEALS: Centro awakes

Supratim Adhikari

Published 7:36 AM, 2 Mar 2011


With the US assets out of Centro Properties, the group now looks to roll all of its Australian assets under one roof, and while the immediate focus will be on getting the amalgamation right the local assets could eventually be up for grabs. Meanwhile, Foxtel?s major shareholder Telstra looks to have changed its tune with regards to a merger with Austar and Federal Treasurer Wayne Swan gives his blessing to the $14.6 billion AMP-AXA Asia Pacific tie-up ? but it isn?t without conditions. Elsewhere, Fortescue may be about to lose a major shareholder and Tata Steel raises its stake in Riversdale Mining.

Centro Properties Group, Centro Retail Group

After years of torpor the changes are coming thick and fast at Centro Properties Group (CNP). The US portfolio has been unloaded to private equity heavyweight Blackstone for $US9.4 billion and CNP boss Robert Tsenin hasn?t wasted any time in unveiling the future face of the shopping centre owner. CNP has reached a debt for equity agreement with its lenders and hedge funds to swap 73 per cent of its senior debt on the headstock in exchange for most of its Australian assets. These assets are destined to be rolled into a new listed fund a process that The Australian Financial Review reckons could take around nine months. The restructure will see the end of CNP while investors in Centro Retail Trust (CER) will move to the new entity. The debt restructure wipes out all of CNP?s external senior debt leaving it with the $100 million in cash that the lenders have agreed to distribute among investors, hybrid debt holders and junior creditors. While CNP shareholders would have received nothing for their troubles if CNP had gone under, stretching that $100 million will see CNP shareholders get about 13 cents a share. The restructure will see the end of CNP while investors in Centro Retail will move to the new entity and Tsenin hasn?t ruled out the eventual sale of the Australian assets. That means that the likes of Lend Lease and Stockland will keep an eye out for any opportunities but for the time being the focus of CNP?s lenders and the 50-odd hedge funds that will end up controlling a majority of the new vehicle is to start the rebuild. Moelis &Co and Lazard will continue to work as advisers to Centro on the restructure. UBS acted as financial advisor to CER. Clayton UTZ and Weil, Gotshal & Manges LLP provided the legal advice. Separately, the AFR reports Freehills and Skadden, Arps, Slate Meagher & Flom & Affiliates acted as legal advisors to Centro for the US deal, with Moelis & Co and JP Morgan providing the advice. Blackstone was assisted by Wells Fargo, Deutsche Bank and Barclays Capital while the legal advice came from Gilbert + Tobin and Simpson along with Thatcher and Bartlett.