Winston Sammut, managing director of Maxim Asset Management Ltd., said Centro Properties Group will have to sell its shopping mall assets to finance its debt obligations. He was speaking in an interview in Sydney.
On the viability of Centro:
``It is viable until 15 February, which is the date that's being agreed to by its lenders, so I don't see that as being an issue. In the longer term, there is a question, which is whether they can come up with a plan that will satisfy the banks.''
On asset sales:
``There are a number of avenues that are open to them or to anyone trying to come out of the situation, including capital raising, but it would be ludicrous and very inappropriate to do that at this point in time. And I'm not sure they would get the backing to do that yet. So asset sales is really the main driver of getting them out of this predicament.''
On selling assets worth A$1 billion ($859 million):
``We're talking about refinancing a couple of billion of dollars. So I think the banks would probably be satisfied with asset sales of that magnitude. Centro, at the end of the day, has got assets of about A$26 billion and debt of about A$18 billion.''
On the kind of assets Centro can sell:
``I would expect that the U.S. market for shopping centers is probably a bit on the slow side at the moment. I think they would have difficulty trying to get a sale of assets over there and be a price that would be reasonable in this kind of environment, so one would have to look at the Australian assets as probably the most appropriate to sell and probably the ones that are in more demand. There are a number of players in the market that would be willing to snap up some.''
On possible buyers:
``Stockland (SGP), GPT Group (GPT), Mirvac Group (MGR), Colonial (First State) Retail (Property Trust), there are a number of players that would certainly be looking at the assets that they think would be appropriate for them to buy and probably will put in some figures and some bids in due course.''