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SYDNEY: Australian shopping centre owner Centro posted a record loss of A$2.06 billion (US$1.78 billion) Friday as it battles to restructure its huge debt after being badly hit by the global credit crunch.
The property investor, which has major US holdings and looked close to collapse after the US subprime mortgage crisis, revealed that its total debt stands at A$6.56 billion.
Centro Property Group booked an annual net loss of A$2.06 billion for the financial year to June 30, a record amount of red ink for the firm.
It blamed falls in US and Australian property values and joint venture investments as both those economies slow.
"While there is no disguising the seriousness of the situation for the Centro group, we are making incremental steps towards stabilisation in a difficult environment," said the company's chief executive Glenn Rufran.
"Our fundamental task remains to secure long-term debt restructuring, and we will continue to work with our lending groups to achieve this goal."
The company's loss compared with a net profit of A$469.7 million for the previous financial year.
Centro said it was in talks with lenders to extend its debt repayments for the sixth time since late 2007 or risk insolvency, but Rufran said the firm's headline loss did not reflect its operating performance.
The firm's revenue for 2008 rose 94 percent to A$745.1 million, primarily due to two business mergers that occurred in the second half.
Centro had to write down the value of its US properties earlier this year after the subprime crunch put the company under severe pressure following its rapid expansion in the United States in 2007.
Its share price plummeted by 75 per cent in one day in December when it announced it was considering asset sales because it could not secure sufficient financing in tight credit markets, sending the stock market into a tailspin.
Defaults on subprime - or higher risk - US mortgages have triggered huge losses on investments whose value is linked to the loans. A number of global banks have been badly hit, triggering a worldwide credit squeeze.
- AFP/yb
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