Securityholders have backed Centro’s restructure but the shopping centre owner still faces another hurdle before it can go ahead with the overhaul.
Centro Retail Group (CER) and Centro Properties Group (CNP) securityholders meeting in Melbourne on Tuesday voted to combine the two arms of Centro.
The aggregation plan for one of Australia’s highest profile casualties of the global financial crisis will meld the companies into a simplified entity.
The consolidation is a precondition to lenders providing long term debt financing.
Aggregation of the two Centro arms would create a new listed Australian retail property trust to be called Centro Retail Australia.
Centro Retail Australia would own or manage $7 billion of shopping centre assets across Australia.
On Tuesday, the chairman of Centro Retail Group, Peter Day, and the chairman of the Centro Property Group, Paul Cooper, said the restructure would need the approval of the NSW Supreme Court.
A hearing on the aggregation is scheduled for November 24.
Mr Cooper told the meeting that Centro’s former auditor, PriceWaterhouseCoopers (PWC), had indicated it would oppose the scheme of arrangement to implement the aggregation.
“Yesterday, Centro’s trusted former auditor, PWC, said in the NSW Supreme Court that it would challenge the CNP schemes in that court later this week,” Mr Cooper said.
“It would be extremely disappointing if after four years of hard work with our staff, tenants and many other stakeholders, including substantial uncertainty and difficulty for our investors, if Centro’s former auditor opposes CNP’s application to the court.
“If as a result of the course that PWC is taking, the court does not approve the schemes and Centro is forced into receivership, this would prevent our shareholders receiving any payment under the scheme.”
Under the restructure, CER securityholders will receive one Centro Retail Australia security for every 5.29 CER securities held.
CNP securityholders will receive 5.03 cents for each of their CNP securities and have no ongoing economic interest in Centro.
Mr Cooper said it would be an extraordinary achievement if Centro gained approval from the NSW Supreme Court.
Centro will have preserved 500 jobs in Australia and a portfolio of about 100 shopping centres, he said.
“We have kept all of our tenants in good premises and we will have returned the Centro Group to the Australian stock exchange as a first rate shareholder-based company,” Mr Cooper said.
“That’s a task that is extraordinarily complex, made all the more so because of the very complex ownership structure that the company evolved to and also the sheer scale of the debt and the number of financiers involved.”
Mr Cooper said he was proud to have to kept the enterprise together and to have delivered the best terms to its securityholders.
Centro had gone through a very humbling experience but management had emerged stronger, he said.
“I think it (the group) will proceed in its new guise on a very good footing,” Mr Cooper said.
