Centro finds support for restructure proposal

Major shareholders in Centro Retail Trust have backed a restructuring proposal for the Centro Properties Group.

Proxy votes submitted at nine meetings in Melbourne today voted in favour of the scheme with approvals of between 85% and 96%, the Australian Financial Review reported.

Investors in other Centro offshoots still need to vote on the proposal, but winning the support of Centro Retail Trust investors is considered crucial to the restructure going ahead.

The AFR notes, however, that some investors such as JP Morgan are still unhappy with the proposal and could vote it down.

Under the restructuring proposal Centro Properties Group will be wound up, with the remaining Australian assets held by subsidiary Centro Retail Trust and other unlisted Centro funds amalgamated into a new listed property trust, Centro Retail Australia.

The decision by institutional investors and hedge funds to back the proposal follows the Centro Retail Trust sweetening the deal by offering investors a 10% improvement in their stake in Centro Retail Australia.

Centro faces a December 15 deadline to pay back $3 billion of debt, which it cannot meet under its existing structure.

Failure by the board to win approval for the restructure will most likely cause the company to be placed in the hands of external administrators.