Centro CEO Throws in the Towel

A month ahead of the mid-February deadline for beleaguered Australian retail giant Centro to refinance about A$3.9 billion (U.S.$3.46 billion) in short-term debt, company CEO Andrew Scott has resigned.The company has appointed Glenn Rufrano as its new CEO, effective at once. Rufrano was previously the head of the company’s U.S. operations.Scott oversaw the rapid expansion of the Melbourne-based listed property trust in the last two years, when it bought more than 700 retail properties in the United States, most notably the entirety of New Plan Realty Trust last year, which was headed at the time by Rufrano. Centro has not been able to refinance the debt it incurred for those acquisitions.Scott is receiving about $A3 million (U.S.$2.66 million) in severance, and Rufrano’s salary and bonus package will also be roughly $A3 million, plus 1 million Centro share options. Shares in Centro, as of Tuesday evening in Australia, are trading at about A$0.60. At one point last spring, they were valued at nearly $A10.In a statement to the Australian Securities Exchange yesterday, Centro also said that “there is a prospect that the proportion of current liabilities may have been higher than reported,” referring to the proportion of liabilities the company reported last June. The statementalso noted that Centro is currently in negotiation with U.S. noteholders–whom the company owes $450 million–stressing that the notes aren’t in default. Centro further stated that there may be another extension of the Feb. 15 deadline on its short-term debt.”Centro’s fate is really now in the hands of its lenders,” Winston Sammut, managing director of Maxim Asset Management, a Sydney-based funds management company that specializes in listed property securities and other real estate-related investments, told CPN this afternoon. “I seriously doubt that Centro will survive as we’ve known it. If an entity of that name does survive, it will be considerably smaller, and probably won’t resemble the current structure very much at all.”