New York City Centro Properties Group reported that it will extend and refinance $2.7 billion of loans in its U.S. business.
The Australian shopping center owner, which ceded control to banks after failing to refinance debt in December 2008, said it has received an extension until December 2011 on $2.3 billion of debt and will refinance a further $400 million within Super LLC, a joint venture of Centro, Centro Retail Trust and Centro MCS 40.
“We have made good progress and have commenced discussions with our lenders on potential restructuring options we have under consideration,” Robert Tsenin, CEO, said in a statement. “Our assessment has confirmed that any restructure will be complex, with numerous structural, financing and stakeholder considerations to manage.”
In 2006 and 2007, former Centro CEO Andrew Scott borrowed to acquire $9 billion of malls, then spun off the centers into funds, which Centro managed for a fee. That backfired when debt costs spiked and asset values slumped in the financial crisis, with banks agreeing in December 2008 to work with the then-owner of 650 U.S. malls to avoid liquidation.
The restructure could take until the end of 2011 to implement, Centro said.