Home Centro Properties restructuring
When Centro Properties collapsed, the restructuring had to be innovative to cover more than 600 shopping centres in the US and Australia and stakeholders with significantly divergent interests. The solution, a conversion of more than $1 billion in debt into a ‘hybrid instrument’, set a precedent as an alternative to allowing a company to fall into insolvency.
Corrs’ pivotal role for the US lenders involved bringing together stakeholders to facilitate new money facilities and the splitting of security pools, including three sets of lenders in the US and Australia.
A key task was to re-work documentation to reflect asset realisation and then a stabilisation strategy. The transaction was complicated by the cross-border enforcement and documenting of inter-creditor arrangements under US and Australian law, and by the negotiation of a restructure against the uncertainty of the formal insolvency of trust structures.
Corrs’ role continues today in advising some of the US lenders as the restructure unfolds.