Centro Properties Group - History

History

Centro was established on 18 February 1985 under the name Jennings Properties Limited, and shares were issued in the same year on the Australian Stock Exchange. In January 1991, Jennings Properties Limited was renamed Centro Properties Limited, with the stock being changed across in May 1991. In September 1997, Centro was restructured to become a stapled security structure named Centro Properties Group. Centro is a stapled security comprising one unit in Centro Property Trust (CPT) stapled to one share in Centro Properties Limited (CPL). CPT is the owner of Centro's interests in the properties and CPL, along with its subsidiaries, provides management services to CPT.

Between 2003 and 2007, Centro and its managed funds completed a many transactions including the acquisition of MCS’s property syndicate business and substantial portfolios of US convenience shopping centres and operating businesses.

On 17 December 2007, Centro announced it was continuing to negotiate the refinancing of A$1.3 billion in maturing facilities, and had obtained an interim extension until 15 February 2008 of all facilities maturing prior to that date. In addition, US joint venture facilities were also been similarly extended.

On 16 January 2009, Centro announced completion with its financiers for a long term refinancing and debt stabilisation agreement. The key features of the refinancing and debt stabilisation included:

• A three year extension on A$3.9 billion of the senior syndicated debt facility.
• A$1.05 billion Hybrid Security.
• Extension of the debt facilities within Super LLC (Centro’s US joint venture investment with Centro Retail Trust (CER) and CMCS 40).
• Agreement for the extension of debt facilities for many of Centro’s managed funds
• Reduced pressure to sell property assets within Centro and its managed funds.

In September 1999, Centro acquired the management rights for Prime Retail Property Trust (PRX), and in October 2004, it merged with Prime Retail Group under a court-approved scheme with a ratio of 5 Prime securities per 1 Centro security.

Throughout the 2000s, Centro acquired numerous assets:

• CT Retail Investment Trust (July 2001)
• MCS Syndication Business (July 2003)
• 14 international assets located in California (August 2003)
• Centro launched its first international syndicate, MCS 32 (November 2003)
• Kramont Realty Trust (a listed US REIT) (August 2005) – USD $1.6 billion
• Centro Retail Trust was spun off from the main fund (August 2005)
• Heritage Property Investment Trust (a listed US REIT) (July 2006) – USD $4.3 billion
• New Plan Excel Realty Trust (a listed US REIT) (February 2007) – USD $5.0 billion.
• Galileo Funds Management (May 2007)
• Centro Watt Joint Venture (May 2007)

On 4 November 2010, a process designed to allow CNP and its managed funds to jointly evaluate these expressions of interest through a formal competitive market process commenced

On 1 March 2011, CNP and its managed funds announced its proposed restructure including :

• US Assets Sale – Centro and its managed funds entered into a binding stock purchase agreement with BRE Retail Holdings, Inc, an affiliate of Blackstone Real Estate Partners VI, L.P. (“Blackstone”) to sell all of their US assets and platform for an enterprise value of approximately US$9.4 billion;
• Headstock Debt Restructure – Centro has agreed with holders of approximately 73% of Centro’s senior debt (“Senior Lender Group”) to progress a creditors scheme of arrangement to effect the cancellation of all Centro’s senior debt in consideration for substantially all Centro’s Australian assets. The Senior Lender Group has agreed that $100 million would be made available for ordinary security holders and other stakeholders, junior to the senior lenders; and
• Discussions of Australian Funds Amalgamation – Centro has entered into discussions with its senior lenders, Centro Retail Trust (CER), and other Australian managed funds with a view to aggregating their respective portfolios to create a listed fund (“Amalgamated Fund”) owning a retail property portfolio of high quality Australian regional and sub-regional shopping centres. Centro’s share of the Amalgamated Fund would be distributed to its senior lenders as part of the scheme of arrangement described above.

On 29 June 2011, the sale of the US portfolio was completed.

At a series of meetings on 22 November 2011, CNP securityholders, Convertible Bondholders, Hybrid Lenders and Senior Lenders, as well as Centro Retail Trust (CER) securityholders, voted in favour of the restructure of Centro and its managed funds.

The Supreme Court of New South Wales approved the Senior Lenders’ and Hybrid Lenders’ schemes of arrangement necessary to effect the restructure.

CNP’s $2.7 billion Senior Debt which matured on 15 December 2011 was cancelled in return for the transfer to Senior Lenders of substantially all of CNP’s Australian assets and interests. CNP Securityholders, Convertible Bondholders and Hybrid Lenders received their relevant proceeds, allocated as follows:

• 5.03 cents per CNP security or $48,925,082 in total to CNP securityholders;
• 5 cents in the dollar or $21,074,918 in total to Convertible Bondholders in exchange for redemption of their convertible bonds; and
• $20,000,000 in total to secured Hybrid Lenders in return for the cancellation of their debt.

Centro Properties Group has since changed its name to CNPR, and is in the process of being wound up.

CNP managed funds including CRT, CAWF and DHT aggregated their respective portfolios to create the listed Australian retail property trust, CRF. CRF was formed by the stapling of CRL, CRT, CAWF and DHT through schemes of arrangement that were approved by the Supreme Court of New South Wales on 1 December 2011 (the Aggregation).

The Aggregation implementation date was 14 December 2011.

CNP contributed its Australian assets (including its funds and services business) to CRF, in exchange for scrip in CRF. That scrip, in addition to the CRF scrip which CNP held as a result of its investments in the aggregated funds resulted in CNP’s ownership of the A-REIT being approximately 72% on implementation of aggregation. On implementation of the Senior Lenders’ schemes of arrangement, CNP’s scrip in CRF was distributed to the Senior Lenders on a pro-rata basis to their senior debt holdings. CNP securityholders did not receive any securities in CRF.