Centro Properties still working on debt extension

By Victoria Thieberger

MELBOURNE (Reuters) - Australia's debt-laden Centro Properties Group (CNP.AX: Quote, Profile, Research), which owns 700 U.S. shopping malls, said it was pleased with progress on extending an April 30 refinancing deadline, but had not yet reached an agreement with creditor banks.

Optimism in the market that Centro would secure a deal saw its shares rise as much as 26.5 percent on Friday.

Centro, which borrowed heavily last year to fund a rapid U.S. expansion, faces an end-April deadline on A$5.4 billion ($5.0 billion) of debt, and is under pressure to sell assets to raise cash.

Centro, one of Australia's biggest casualties of the global credit crunch, ran into trouble when credit markets froze up last year and its usual avenues of borrowing were closed.

Centro's comments followed a report in The Age newspaper that a decision to extend the Australian banks' deadline from April 30 to September 30 had been made at a meeting of all financiers last week in San Francisco.

Centro told Reuters no agreement had been reached, although the banks were working on an extension.

"While the Australian banks have not formally extended Centro's financing deadline beyond April 30, they have begun work on the extension," a Centro spokesman said.

Centro was pleased with the positive comments reported by bank representatives, which reinforced Centro's belief that its underlying business was sound, he said.