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UPDATE 1-Westfield gets $20 bln financing for proposed restructuring
March 26, 2014 / 3:15 AM / 3 years ago

UPDATE 1-Westfield gets $20 bln financing for proposed restructuring

(Adds restructure details, analyst comments)

By Maggie Lu Yueyang

SYDNEY, March 26 (Reuters) - Australian shopping mall giant Westfield Group said on Wednesday it has entered into A$22 billion ($20.12 billion) of financing facilities required for its restructuring plan, which has yet to receive approval from investors.

The restructuring comes at a time when traditional Australian retailers are struggling with slowing growth and a shift to online shopping. The plan should put a clearer focus on the group’s mainly U.S. and UK international assets.

Westfield said the A$22 billion funding commitments include A$14 billion worth of two-year bridge facilities and A$8 billion of 2-6 year bank facilities with further details of the facilities to be released in late April. Westfield declined to name the providers of the funding.

The financing will help fund Westfield’s plan to separate its global retail assets from its Australia and New Zealand businesses, which will then be merged with Westfield Retail Trust to form a new company.

Morningstar analyst Tony Sherlock said the financing facilities were just “preemptive” for the company to push ahead its restructuring plan.

“The restructure has not gone ahead. If it does, it appears that the facilities will be in place to facilitate that,” Sherlock said.

Westfield proposed the restructuring in December 2013. The two separately listed companies the plan will create will be called Scentre Group in Australia and New Zealand, and for the international portfolio, Westfield Corp.

Westfield faces doubts from some investors over the plan.

“The issue with investors doing this is that the transaction is too expensive,” said Sherlock. “So if I think it’s too expensive, just because you’ve got the finance to do it, doesn’t mean you are going to make it cheaper.”

$1 = 1.0933 Australian dollars Editing by Paul Tait and Matt Driskill

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