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Post by jeffolie on Dec 17, 2007 13:41:30 GMT -6
The fifth largest shopping mall owner in the US, Centro Properties is also melting down. In one morning, the Centro Group has revealed that it has been unable to roll over $3.9 billion in short term loans that expire on February 15, 2008. There’s an additional $3.4 billion that falls due within 12 months and the remaining $10.6 billion expires some time after that. So, what’s the solution? A complete review of everything, fire sale of assets, suspension of redemptions and abandonment of distributions. Heaven forbid. No wonder shares in Centro Properties Group collapsed today. The stock last traded before Thursday’s suspension at $5.70, capitalising the group at $4.817 billion. wallstreetexaminer.com/blogs/winter/?p=1282#more-1282
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Post by jeffolie on Dec 17, 2007 13:49:20 GMT -6
76% "Slump" in Centro Property (US Malls) The understatement of the year award goes to this headline: Centro Shares Slump After Profit Forecast Cut. Centro Properties Group, the owner of almost 700 U.S. malls, slumped 76 percent in Sydney trading after cutting its profit forecast as it struggles to refinance debt, the latest victim of the U.S. subprime mortgage rout. The first-half dividend payment will be scrapped, and a decision on when to reinstate payments will be made after a review of the business, Melbourne-based Centro said in a statement today. The company's traditional sources of funding are "shut for business" Chairman Brian Healey said in the statement. Centro's board and management will undertake a strategic review of its business, the statement said. The company, which owns shopping centers in about 40 U.S. states including the Roosevelt Mall in Philadelphia and Clearwater Mall in Florida, increased its debt to 44.1 percent of assets in fiscal 2007 from 29.78 a year earlier. It has more than A$5 billion in outstanding bonds and loans according to data compiled by Bloomberg. "We never expected nor could reasonably anticipate that the sources of funding that have historically been available to us and many other companies would shut for business," Centro's Healey said in the statement. A 76% decline is quite the "slump". Kiss this company goodbye. It is likely finished. For more on Commercial Real Estate, please see Implications of Commercial Real Estate Collapse. But the real story here is not the "slump" but the sudden drying up of financing for commercial real estate. www.howestreet.com/articles/index.php?article_id=5320
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Post by jeffolie on Dec 17, 2007 19:13:14 GMT -6
Centro suspends fund withdrawals and withdrawals have been suspended from the Centro Direct Property Fund (DPF) and the Centro Direct Property Fund International (DPFI) in the wake of announcements made on Monday by Centro Properties Group. Securities in Centro Properties Group lost almost three quarters of their value in early trading after the trust downgraded its full year distribution guidance due to higher funding costs. At 1050 AEDT, the value of Centro securities on the Australian stock exchange had dropped $4.00, or 70.18 per cent, to $1.78. news.smh.com.au/centro-suspends-fund-withdrawals/20071217-1hi9.html
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Post by Ryan on Dec 17, 2007 20:54:27 GMT -6
Could this be the "black swan" event that gets the ball rolling, and sends the market crashing down? How many malls does it operate in the U.S again? 700? ouch!! That will make news for sure.
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Post by blueneck on Dec 18, 2007 5:41:49 GMT -6
Malls as a shopping venue have been in a long decline for a decade or more. every major midwest town in my region has dead or dying malls. They just nuked the mall that was once the biggest and most popular one here but it fell into disrepair and all the anchors had long moved out.
A disappointing holiday sales season would likeluy finish off a good chunk of the remaining marginal operators
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Post by unlawflcombatnt on Dec 18, 2007 5:46:59 GMT -6
76% "Slump" in Centro Property (US Malls).... Centro Properties Group, the owner of almost 700 U.S. malls, slumped 76 percent in Sydney trading after cutting its profit forecast as it struggles to refinance debt, the latest victim of the U.S. subprime mortgage rout. The first-half dividend payment will be scrapped, and a decision on when to reinstate payments will be made after a review of the business, Melbourne-based Centro said in a statement today..... Does "Melbourne-based" mean "Australian-owned"? Are 700 U.S. malls now owned by an Australian company?
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Post by graybeard on Dec 18, 2007 6:14:42 GMT -6
My guess would be Australian company with Communist Chinese money. That makes for mixed feelings..
GB
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Post by judes on Dec 19, 2007 22:52:16 GMT -6
Well the Malls certainly must be in trouble, they have managed to find more clever ways to bilk already strapped consumers out of more of their dollars. I stood in line for about 10 minutes at a local mall to get some mall gift certificates for Christmas gifts. When I got up to the counter they said there was a $2 fee for each gift certificate. And if that wasn't outrageous enough they said the recipients of the certificates had only 1 year to use them after which they would deduct $2 per month of value from the certificate!! I told them no thanks I'll give them cash instead. That is just outrageous. Why would a mall charge for a certificate when they already have your cash, and are guaranteed sales at the mall with the certificate? Another scam in the making, disgusting.
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