http://www.theaustralian.com.au/business/sorting-out-centro-is-ro...

http://www.theaustralian.com.au/business/sorting-out-centro-is-robert-tsenins-swan-song/story-e6frg8zx-1226019992762


Sorting out Centro is Robert Tsenin's swan song
Turi Condon, Property editor From: The Australian March 12, 2011 12:00AM

A YEAR after taking on the toughest role in corporate Australia -- the workout of debt-plagued shopping centre owner Centro Properties Group -- Robert Tsenin says he has "zero" interest in corporate life once the job is done.
No chief executive titles, no directorships.

"I'm going to ride off into the sunset. I am not looking for a job. I'm too old," said the 61-year-old.

Nor, he said, had anyone offered him a new job.

The chatter increased after a game-changing deal was struck last month to sell Centro's 115 US shopping centres to private equity giant Blackstone for $US9.4 billion.

Mr Tsenin, a former managing director of Goldman Sachs (Australia) and a previous finance director of Lend Lease, said there was a very long way to go before a workout was done.

One big issue is the junior creditors -- the hybrid securities lenders, convertible bond holders and class action litigants -- who are owed billions, but have been offered $100 million to squabble over.

Start of sidebar. Skip to end of sidebar.
.End of sidebar. Return to start of sidebar.
"To be blunt, the lender group will have the alternative of putting it (Centro Properties) into receivership," Mr Tsenin said.

Around $3.1bn of Centro Properties' debt matures in December and there is no means for paying it, he said.

"The sale of the US was just the first step, the critical next step is to simplify the group. It's simply not a sustainable structure the way it is with the co-ownership of the assets, some of the very hard-to-understand entities, and the multiple puts and calls."

There had been no possibility of retaining the US portfolio as more than $2bn of capital was needed to revitalise it, he said.

But the sale released $1.4bn which could kick off the restructure of a new $4bn Centro.

Mr Tsenin said a new clean listed company owning Australian shopping centres needed to be created. "It was always the way the company should have been," he said.

Last year, Centro had been put up for sale lock, stock and barrel.

Mr Tsenin said while a new Centro -- in the form of a listed Real Estate Investment Trust -- would unlock future redevelopment profits, selling the 40 Australian centres was not off the table.

"Now," he said, "we have a genuine comparison (the potential new REIT) against what the assets could be sold for in a private sale.

"We know where the buyers will roughly sit assuming the offers the first-time around were in good faith."

However, there had been no new offers for the Australian portfolio, Mr Tsenin said.

Last year, The Australian reported that a bid for the Centro empire by a consortium headed by Lend Lease prompted the lenders and board to put the whole group on the sales block. Other interested Australian companies have been Stockland and Colonial First State.

It was too soon to say how a new Centro would be formed, Mr Tsenin said.

Market speculation has bet that head stock Centro Properties Group would be folded into listed sister trust Centro Retail. There were a number of options including "stapling" the units in the two trusts together, he said.

Mr Tsenin took the Centro chief executive job in February 2010 on a three-year contract. He'd leave sooner if a new Centro were successfully launched. "I've make it very clear that I do not want to stay with any other successor entity of Centro," he said.