Centro's US mall manager posts US$299m loss

August 21, 2008
Centro's US mall manager posts US$299m loss
Writedown in value of business behind Centro NP's net loss in Q2

(MELBOURNE) Centro Properties Group, the Australian owner of more
than 650 US malls, said the unit that manages US assets acquired last
year for US$5.2 billion chalked up a second-quarter loss after
writing down the value of the business.

Centro NP had a net loss of US$299 million for the three months ended
June 30, the Melbourne-based parent said yesterday in a statement to
the Australian stock exchange. The unit booked a US$95 million charge
for writing down properties and a US$173.5 million impairment in the
company's goodwill and the value of its property management business.

'There is substantial doubt about the company's ability to continue
as a going concern given that the company's liquidity is subject to,
among other things, its ability to negotiate extensions of credit
facilities,' Centro NP said in a statement filed on Tuesday with the
US Securities and Exchange Commission.

Centro Properties' market value plunged in December when the seizure
in global credit market shut funding avenues for the company and it
was unable to repay borrowing used to buy New Plan. It has since won
five reprieves from lenders on repayments for as much as A$6.6
billion (S$8 billion) in debt.

Centro's US properties lost 8.8 per cent of their value amid slowing
retail sales and a potential recession, according to the parent
company's first-half earnings report. It also has 129 shopping
centres in Australia and New Zealand and is trying to sell stakes in
its funds to repay debt.

Centro NP generated net income of US$4 million in the period from
April 5 to June 30, 2007, according to its statement. April 5 was the
date the US unit was created out of Centro's acquisition of New Plan
Excel Realty, the biggest US acquisition by an Australian real estate
investment trust.

Centro NP has US$4.5 billion of real estate assets, according to its
second-quarter earnings.