Archive for the ‘International’ Category

Centro Cedes Control to Banks

by David Bodamer December 17th, 2008

This may seem like a contradiction after yesterday’s news about Centro getting an extension. The confusion is a product of Centro’s convoluted corporate structure. Yesterday’s announcement (the link is below), refers to Centro Retail Properties–a subsidary of parent company Centro Properties Group. Today’s announcement covers the parent company.

Australia’s Centro Properties Group, the world’s fifth-largest shopping-center owner, plans to cede control to its banks after failing to refinance A$5.1 billion ($3.4 billion) of debt accumulated as it acquired 650 U.S. malls.

A stake of as much as 90.1 percent in Centro will be used to pay off some of the debt, according to a statement yesterday. Melbourne-based Centro faces the prospect of collapse if it doesn’t finalize terms of the transaction with its bankers within a month, it said.

Centro has struggled to pay its debt after the company spent $9 billion in the two years to May 2007 buying shopping centers in the U.S., which may be in its worst recession since World War II. Centro is part of a wave of Australian corporate collapses that helped destroy A$740 billion of shareholder value this year.

“The outcome provides a future for Centro and retention of some value for our existing shareholders and is superior to the prospect that Centro otherwise faced of entering administration or liquidation,” Chairman Paul Cooper said in the statement.

Link.

Past links and stories:

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Centro Gets Another Extension

by David Bodamer December 16th, 2008

Centro Properties Group, one of Australia’s highest profile casualties of the global credit crisis, was given a lifeline on Tuesday when lenders agreed to refinance $4.65 billion in overdue debt.

Without the refinancing, Centro could have been forced into administration by its creditors, potentially triggering a fire sale of retail properties in the United States, Australia and New Zealand.

“This outcome will stabilise Centro and provide sufficient liquidity with time for the company to maximise the value of its property operating platform and funds management business,” Centro Chief Executive Glenn Rufrano told reporters during a teleconference.

Centro’s Australian lenders have agreed to swap A$1.05 billion ($697 million) in debt for convertible bonds, worth 13-14 cents per Centro security, or roughly a 50 percent premium to Centro’s last trade.

Link.

Past links and stories:

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Westfield Opening London Megamall

by David Bodamer October 29th, 2008

WHEN the first shoppers flock through the doors of Westfield’s new mega-mall in London tomorrow, the head of the company’s British arm will be thinking of sleep.

Michael Gutman admits he’s lost a fair bit of shuteye in the lead up to the opening of the company’s first London shopping centre.

For one thing, the timing isn’t perfect with Britain on the brink of recession and shoppers tightening their pursestrings.

The idea of opening what will be Europe’s biggest indoor mall in the middle of a city where shoppers are devoted to visiting stores on the high street has also come under fire from some traditionalists.

Against that background, along with the mammoth task of ensuring the £1.6 billion ($4.13 billion) centre in London’s White City opens on time, Mr Gutman has had his fair share of sleepless nights.

Link.

No Comments Related Topics: Development, International, News, REITs, Retail Real Estate |

Concerns Begin to Mount at Developers Diversified

by David Bodamer October 21st, 2008

Retail REIT Developers Diversified is now hitting a rough patch. The company briefed the market on the status of $1.7 billion in debt maturing the next two years. The company reported that it has $525 million of financing during the third quarter, leaving it with less than $50 million in maturing loans before the end of the year.

To insulate itself from further debt exposure, the company is slowing down Read the rest of this entry »

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Inland American Builds Up Stake in Ramco-Gershenson

by David Bodamer October 13th, 2008

Inland American, which last month bought shares in CapLease Inc., has purchased shares in another REIT. This time it’s Ramco-Gershenson Properties Trust, according to an SEC filing from Friday. Inland now owns 1,652,887 shares in Ramco-Gershenson, about 9 percent of the company’s outstanding stock.

No Comments Related Topics: International, News, REITs, Retail Real Estate |

MGM’s CityCenter Secures Financing

by David Bodamer October 6th, 2008

The credit crisis continues to deepen. Yet another large development has secured financing. This time it’s the mammoth CityCenter project in Las Vegas.

MGM Mirage said Monday that it completed the first stage of its $3 billion financing package for CityCenter, a $9.2 billion Las Vegas Strip casino project being developed with Dubai World.

MGM said it had secured a $1.8 billion senior bank credit facility that will mature in April 2013.

CityCenter has received addition commitment letters of more than $500 million, which executives said will be added to the facility once completed.

CityCenter – which MGM Mirage (nyse: MGM – news – people ) officials have called the most expensive private commercial development in U.S. history – is expected to include six high-rise towers with a 4,000-room hotel-casino, condominiums, boutique hotels and a retail, dining and entertainment complex.

No Comments Related Topics: Development, Finance, International, Mixed-Use, News, Retail Real Estate |

Hypo Rescued

by David Bodamer October 6th, 2008

Hypo Real Estate Holding was rescued over the weekend. This is an ominous sign for commercial real estate because Hypo was a big player in financing the sector. At least part of the problem seems to be how Hypo was funding itself as opposed to this stemming from its pool of assets.

“It was basically a funding mismatch. The maturity of the liabilities was shorter than that of the assets,” said Philip Haessler of German broker Equinet. “As the financial crisis and the funding situation deteriorated, in large part because of the bankruptcy of Lehman, HRE found itself unable to cover its short-term liabilities.”

“It was a strategic mistake. Under different circumstances it wouldn’t have been an issue. But now nobody trusts anyone and it’s impossible to raise short-term funding,” he said.
HRE said the additional credit line “became necessary as a result of the intensification of the financial crisis in the last week.”

HRE shares fell 35% in Frankfurt trading, a measure of how concerned investors still are that the bailout in place may not be enough. The shares are down 86% so far this year.

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UBS Sells Assets

by David Bodamer October 2nd, 2008

UBS isn’t waiting for the bailout to pass. It’s found a way to move some of its commercial and residential mortgage assets. Terms were not disclosed so there’s no way to know how much the bank marked down its assets or who bought them. But perhaps some of the vulture funds we’ve been hearing about were involved.

Shares of UBS soared 10.5%, or 2.06 Swiss francs ($1.81), to 21.76 Swiss francs ($19.21) on Thursday afternoon in Zurich, after the Swiss bank said it had “substantially reduced” its U.S. commercial and residential mortgage-related assets, mainly through disposals. A spokeswoman for UBS declined to value the size of the disposal or say where the toxic assets had gone.

UBS’s comments on Thursday suggest it could have disposed of up to 10.0 billion Swiss francs ($8.8 billion) of its toxic assets, said Jean Sassus, an analyst at Raymond James Equities in Paris. “This shows that there are buyers out there who we didn’t know about before, which is good news for everyone,” he said.

UBS declined to say whether the assets were going into government or private hands, but Sassus said the most likely situation was that a club of investors, possibly distressed debt funds, had snapped them up.

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GameStop Acquires French Retailer

by David Bodamer October 2nd, 2008

Grapevine-based GameStop Corp. announced it has acquired Micromania, a French video game retailer that has 332 locations throughout the country. The transaction, worth about $700 million in cash including the assumption of debt, still needs to be cleared by the European Commission and is expected to close in November.

GameStop bought Micromania from L Capital, a private equity fund that was the company’s controlling shareholder. GameStop didn’t have any stores in France, but the Micromania acquisition will put GameStop’s European store count at more than 1,077.

Link.

No Comments Related Topics: International, Investment, News, Retail |

Centro Scores Loan Extension

by David Bodamer September 29th, 2008

Shares in embattled shopping centre owner Centro Properties Group shot up nearly 50% in morning trade today when the company announced a string of victories in discussions with the syndicate of bankers which hold the fate of the group in their hands.

Centro chief executive Glenn Rufrano also said it was his preference to stay on at Centro as its boss beyond January when his formal contract runs out. He said he was keen to manage the company as it stabilises and begins to reorganise its corporate structure assuming its debt problems are eventually solved.

Centro said today that its US lending group had further extended facilities of $US1.3 billion ($1.5 billion) associated with Centro’s joint venture with Centro Retail Trust until December 15.

Link.

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