Centro Shares Plung 70 % On Australian Ex After Profit Forecast Cut on U.S. Subprime

Discussion in 'Wall St. News' started by Cdntrader, Dec 16, 2007.

  1. Centro Shares Slump After Profit Forecast Cut on U.S. Subprime

    By Laura Cochrane

    Dec. 17 (Bloomberg) -- Centro Properties Group, an owner of U.S. shopping malls, plummeted 70 percent in Sydney trading after cutting is profit forecast because it was unable to refinance debt amid the fallout in the U.S. subprime mortgage market.

    Dividends payments are expected to be 40.6 Australian cents in the year to June 30, 2008, down from 47 cents in a previous forecast, the Melbourne-based company said today in a statement. Centro won't pay a dividend in the first half, the statement said.

    The slump wiped A$3.4 billion ($2.9 billion) off Centro's market value as the company said it may have to sell assets after it was unable to refinance A$1.3 billion of debt. Investors, concerned that losses on securities backed by U.S. home loans will escalate, have shunned all but the safest of debt, driving up corporate borrowing costs.

    ``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,'' Chairman Brian Healey said in the statement.

    Shares of Centro fell A$4.00 to A$1.70 at 10:31 a.m. in Sydney, slicing the company's market value to A$1.4 billion. Centro Retail Group declined 61 cents, or 43 percent, to 81.5 cents, valuing it at A$1.9 billion.

    Centro said it may spend about A$40 million refinancing and restructuring its debt. The company has more than A$5 billion in outstanding bonds and loans, more than half of which fall due in the next three years, according to data compiled by Bloomberg.

    Centro Properties took on debt to expand its holdings to more than 800 shopping centers across Australia, New Zealand and the U.S., including adding A$14 billion of American assets in fiscal 2007.

    The $3.7 billion takeover of New Plan Excel Realty Trust in April was Centro's sixth U.S. purchase in less than four years, as Chief Executive Officer Andrew Scott transformed the company from an operator of Australian regional centers into an international mall owner.

    To contact the reporter on this story: Laura Cochrane in Melbourne at lcochrane3bloomberg.net.

    Last Updated: December 16, 2007 19:11 EST
  2. wow. interesting story
  3. Anybody know the S&P mini on this news? By the way, where is a publicly available, after-hours, real time quote on the mini?
  4. www.bloomberg.com carries live quotes on the right of the page.
  5. ROFL!

    The ASX is typical small economy pump and dump market.

    The Centro Group of companies was recommended as a 'buy' only six months ago! The smart money was shorting the stock it seems.
    Macquarie Bank/Group was also recommended as a buy when it was around $95 a share in July this year, it is now $75 and falling.

    Zinifex was supposed to be a takeover target only a week ago and there was retail buying of the stock well into the $15 price range, it is now $13 and falling.

    I wouldn't touch anything on the ASX.
  6. mokwit


    Public have been running wild for years on ASX. May finally be time to short but unfortunately there are no liquid long dated options as far as I can tell - even for the index. Risk:Reward dynamics of shorting via stock makes this unnatractive, made even more so by a public that refuses to accepty the [possible] end.
  7. We also have our own accounting "standards" (or rather 'lack of standards')

    The public in this country are more stupid than your wildest Kentucky redneck, believe me!
  8. mokwit


    Yeah, I kiinda got that impression from flicking through a Louise Bedford book on candlestick trading.
    #10     Dec 17, 2007