The Wall Street Journal-20080115-Credit Crunch- Centro Chief Resigns- Suitors to Look at Books
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Credit Crunch: Centro Chief Resigns; Suitors to Look at Books
The chief executive officer of Centro Properties Group resigned as the debt-laden Australian retail-property concern said it will open its books to Australian and foreign investors in anticipation of selling all or part of itself.
Centro, one of the largest owners of U.S. shopping centers, is scrambling to pay off $3.4 billion in debt coming due next month. The Melbourne-based company put itself on the block this month in one of the most dramatic examples of the damage done to commercial real estate by the global credit crunch.
Chief Executive Andrew Scott is being succeeded by Glenn Rufrano, previously CEO of New Plan Excel Realty Trust, a U.S. shopping-center owner Centro acquired last year using short-term debt it is struggling to repay. In 10 years with Mr. Scott as CEO, Centro grew into the second-largest retail-property owner in Australia by market value and acquired nearly 700 U.S. shopping centers. A Centro spokesman said Mr. Scott wasn't available to comment.
Mr. Rufrano said in a phone interview from New York late yesterday that Centro is considering selling some of its properties but plans to retain lucrative assets in Australia and the U.S. and maintain its funds-management business of pooling investors' money to purchase properties. With those assets, he says, Centro should be able to "bring additional capital into the company."
Centro said this month it received a "significant number of unsolicited expressions of interest" from acquirers and investors. A person familiar with the process said U.S. companies that have expressed interest include Blackstone Group LP, Citadel Investment Group, TPG, GE Real Estate, CB Richard Ellis Group Inc., Morgan Stanley Real Estate Funds, Colony Capital LLC, Goldman Sachs's Whitehall Real Estate Funds and Five Mile Capital Partners.
Australian parties looking at Centro assets include Westfield Group, Macquarie Group Ltd. and Mirvac Group, the person said. Blackstone, Citadel, TPG, Colony Capital, Goldman Sachs, Westfield, Macquarie and Mirvac declined to comment. The rest didn't return messages.
