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Centro Properties sells shopping malls in NZ, Australia

Friday 19th September 2008

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Centro Properties Group, whose shares have slumped almost 100% in the past year, said its managed funds sold shopping malls in Australia and New Zealand to raise A$157.5 million.

The Australia property investment group is trying to extend the term of some US$3.4 billion if debt after talks collapsed to sell assets in the U.S. The stock jumped 14% to 8.8 cents today.

Centro Retail Trust sold the Meadowlands Shopping Centre in Howick and Barrington Shopping Centre in Christchurch for a combined NZ$49.9 million, a 1% discount to the June 30 book value, it said in a statement. Centro Retail and Centro Australia Wholesale Fund also agreed to sell their stake in Centro Southport, a mall on the Gold Coast of Queensland, for A$68 million, a 9.9% discount to book value.

Another unit, Centro MCS, sold Adelaide Central Carpark and Charles Street Plaza for A$47.69 million, a 3.9% discount.

"We are pleased with these outcomes in difficult market conditions," said chief executive Glenn Rufrano. The group is considering more assets sales, he said.

The group which owns about A$24 billion of shopping malls worldwide ended talks this week with a private equity group to acquire properties in the U.S. for US$714 million. Its stock has declined 98.98% this year, tumbling since December, when the company announced difficulties repaying debt.

In May, Centro gained a four-month extension on payment of US$1.1 billion of loans and a seven-month extension on about A$3 billion.

By Jonathan Underhill

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