The opposition of accountancy giant PricewaterhouseCoopers means shareholders in stricken shopping centre empire Centro could receive nothing, the company's chairman says.
Speaking this afternoon at a meeting of Centro Properties Group (CNP), Paul Cooper said PwC, the group's former auditor, opposed the merger of the company with its twin, Centro Retail Trust.
"I need to make it clear to our securityholders that if all resolutions are passed by all stakeholders, CNP still needs to go to the NSW Supreme Court to secure the court’s approval for the scheme," Mr Cooper said.
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"It would be extremely disappointing if, after four years of hard work with our staff, tenants and many other stakeholders, including substantial uncertainty and difficulty for our investors, Centro’s former auditor opposes CNP’s application to the court for the court’s approval of the schemes.
"If, as a result of the course that PwC is taking, the court does not approve the schemes, and Centro is forced into receivership – this would prevent our shareholders receiving any payment under the scheme."
Mr Cooper was speaking to shareholders at a meeting to approve the merger with Centro Retail Trust.
If shareholders and the court approve the deal, they will recieve about 5 cents a share for stock that was worth more than $10 at its peak in August 2007, just before its collapse.
The NSW Supreme Court will hear PwC's challenge on Thursday.
Clearing the first hurdle
The complex merger of the two halves of stricken property group Centro had cleared its first hurdle with securityholders in the trust half of the shopping centre empire voting to approve the deal this morning.
The investors in the property trust Centro Properties manages were in favor of all resolutions, including acquisition of the group’s assets and services business and a change in the responsible entity, Centro Retail said in a filing to the Australian stock exchange today.
The company is holding seven investor meetings today as it seeks to erase $2.9 billion of debt maturing on December 15 and give lenders equity stakes in the new trust.
Earlier, CER chairman Peter Day told securityholders the merger could still go ahead even if CNP shareholders voted against it.
In that case CNP would be put into administration and the deadline to approve the deal extended by 60 days, he said.
He told CER securityholders that if the deal was not approved, "it is likely that insolvency administrators will be appointed to various entities within the CNP [Centro Properties Group] group".
As one of those entities was CER's manager, this might cause "significant operational challenges," he said.
"The reality is that no-one can predict with any certainty what might transpire if the aggregation does not proceed," he said.
He defended the last-minute nature of the improved deal for CER securityholders announced on Friday afternoon.
"It is common for these types of negotiations to come to a head as deadlines approach and agreement must be crystallised, and that is what has happened here."
