Centro Properties' court hearing on planned restructuring adjourned

New York, Nov. 28 - Centro Properties Group said that the Supreme Court of New South Wales has adjourned a hearing to approve its proposed restructuring.

The court reserved its decision. The hearing will resume on a date to be determined.

On Nov. 22 Centro announced that holders of its convertible bonds approved amendments to the bond terms to allow for the company's proposed restructuring plan.

The company needed approval from holders of 75% of the convertibles and received votes in favor of the resolution from 99.93% of voters.

Centro Properties also said that it received 100% of favorable votes from holders of its hybrid securities to approve the proposed arrangement. It was looking to hit at least the 75% threshold for these holders.

The company was looking to holders to approve resolutions for the following:

• The sale of Centro Properties Group's assets to Centro Retail Australia in exchange for securities in Centro Retail Australia;

• The transfer of the securities in Centro Retail Australia to the senior lenders in return for the cancellation of debt; and

• The change of Centro Properties Ltd.'s name.

At the Tuesday meeting, Paul Cooper, chairman of the company's board pointed out that the proposal cannot proceed if the sale and transfer are not passed.

The approval of the name change was not a necessity for the plan to move forward.

Centro added that its former auditor said that it would challenge the plan in court.

Plan terms

Under the agreement, holders of the convertibles are slated to receive 5 cents on the dollar for a total payment of $21,074,918.

Because approval was obtained from holders of both the convertibles and hybrids, Centro security holders will be entitled to receive the 5.03 cents per security, or $48,925,082 in total, while $10 million overall is slated for payment to hybrid holders with $10 million set aside for contingent creditors, the company stated.

Without the restructuring plan, Centro said that it will not be able to meet its maturing senior facility debt due in December.

Following payment, holders will no longer have an economic interest in the company, which will look to wind down as soon as practicable, according to an earlier company release.

When the plan was announced in October, the company entered into agreements with holders of more than 83% of its senior facility debt as of Aug. 31.

Cooper said at the time that the company's secured debt burden exceeded the value of all of its assets by $1.3 billion as of June 30.

Sydney, Australia-based Centro Properties specializes in the ownership, management and development of shopping centers. Its board originally proposed the restructuring plan to holders on Oct. 5.

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