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Centro Properties on the market as debt deadline nears

Beleaguered shopping mall giant Centro Properties Group yesterday said it was putting itself up for sale ahead of a Feb. 15 deadline to refinance A$3.9 billion (US$3.4 billion) in debt.

Centro, which incurred a large debt after an aggressive and highly leveraged two-year acquisition spree, is undergoing a strategic review after struggling last month to service the debt.

The company -- the worst performer on Australia's benchmark S&P/ASX 200 index last year with an 89 percent slide -- had planned to pay off short-term loans that financed the spree by selling long-term debt via the commercial mortgage-backed securities market. But the lack of buyers forced it to get a two-month extension from creditors.

In a statement to the Australian Securities Exchange, chairman Brian Healey said Centro had received "a significant number of unsolicited expressions of interest" from strategic and financial investors.

"Centro is now seeking expressions of interest for key alternatives available to it," Healey said. "This will enable interested parties to substantiate their interest, and for all such proposals to be evaluated from the perspective of the best interests of all Centro stakeholders."

Options include a buyout of the group or sales of assets in Australia and the US, Centro said in its statement.

Chief executive Andrew Scott said the company was trying to set up a process to evaluate offers. He declined to say how many parties had approached Centro, but that they were both domestic and foreign investors.

Centro shares rose 4.95 percent yesterday in Australia to A$1.06 by late afternoon.
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