This case is reserved for use by Columbia Business School Faculty only.
As Australia's second-largest shopping center owner found itself unable to refinance billions in bridging debt amid the global credit crisis in 2007, what were its options for debt restructuring?
As Australia's second-largest shopping center owner found itself unable to refinance billions in bridging debt amid the global credit crisis in 2007, what were its options for debt restructuring?
Centro Properties Group grew into Australia's second-largest shopping center owner through a series of acquisitions, including the April 2007 $6.2 billion purchase of New Plan, a US strip center REIT. Centro had financed the deal with billions in bridging debt, which the company was unable to refinance later in 2007 as the credit markets froze. Centro's share price plummeted, evaporating billions in market value. The company negotiated several debt extensions while trying to agree to debt restructuring with its 23 lenders. In this case students work on a debt stabilization plan structured around a conversion, liquidation or recapitalization after considering Centro's debt maturities, its business model, and income and balance statements.
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