Centro Falls on Asset Sale Talks

123jump.com Staff
21 Dec, 2007
New York City

ASX 200 index fell 1.1% or 70 to close at 6,4247. Largest explosive maker, Orica plans to expand its explosive manufacturing capacity after the rival Dyno Nobel stops from buidling another plant. Japanese investor paid A$202 million for Park Hyatt hotel managed by fund management company MFS. Centro Properties Group fell further after it said that it plans to sell asset to cover debt obligations.

[R]5:00AM New York, 9:00PM Sydney- ASX 200 Index declined by 1.1% after gains in energy and financial stocks.[/R]

ASX 200 index declined 1.1% or 70.1 to close at 6,247.

The Preliminary market turnover was 1.7 billion, worth a total value of $10.75 billion, with 629 stocks moving up, 569 moving down, and 374 unchanged.

Flinders Diamonds was the most active stock with 85.76 million shares changing hands worth $7.89 million.

The world''s largest explosives maker, Orica Ltd has announced its intention to expand production at two of its ammonium nitrate factories at Yarwun and Kooragang Island. The move to expand follows Dyno Nobel Ltd''s decision to scrap its plans to build a plant in Australia. Dyno is Orica''s closest rival.

Dyno Nobel announced last week that it will abandon plans to build the plant despite spending $280 million ($242 million) on the project, opting instead to buy the key explosives ingredient to meet sales contracts with customers including Rio Tinto Group. Orica shares fell 1.8%.
Australian fund manager and resort operator, MFS Ltd''s Park Hyatt Hotel in Sydney has been acquired by an unidentified Japanese investor for a record $202 million ($174 million). The company will receive a transaction fee of at least A$5 million for the record price.

According to a statement released by the MFS the price paid for the hotel, which overlooks Sydney''s Opera House and Harbour Bridge, Southport is the highest ever for a single Australian hotel property. The sale translates to $1.3 million per room at the hotel.

The hotel has been under MFS management since September 2005. MSF has been managing the 158-room Park Hyatt property hotel on behalf of 2,400 investors in its PH Sydney Hotel Trust.
Centro Properties Group stock fell further after the company said that it plans to sell assets as collateral for $4.7 billion of bonds sold by Morgan Stanley and others.

According to a report authored by Merrill Lynch & Co''s Roger Lehman, loans that were used to fund the purchase of 388 U.S. properties by Centro have been packaged into commercial mortgage-backed securities that were also sold by JPMorgan Chase & Co. and Credit Suisse Group.

Comments by Chief Executive Officer Andrew Scott this week that the company may sell malls to help refinance $3.9 billion of debt by February 15, 2008 triggered a $3.8 billion loss in value. Any sale of assets backing the securities may affect payments to bondholders, according to Merrill Lynch.

Centro declined 15%.

Of the ASX 200 index shares, Centro Retail Group led the gainers with a rise of 21.9% followed by increases in Nexus Energy Ltd by 12.5%, in Incitec Pivot by 9.1%, in Aquarius Platinum of 8%, and in PMP Limited of 7.9%.

Of the ASX 200 index stocks Centro Properties led the decliners with a fall of 15.2% followed by losses in Tisman Speyer by 6.8%, Macarthur Coal by 6.4%, in Macquarie DDR Trust of 6.4%, and in Perilya Limited in 5.9%.

BHP Billiton was up 0.4% and Rio Tinto added 0.4%. The energy sector was mixed, with Woodside picking up 2.4%, Santos losing 0.6% and Oil Search dropping 1.3%.

The gold miners were up with Newcrest adding 4.6% and Lihir increasing 3.7%.

The banking sector was mixed, with ANZ gaining 2.1%, the National Australia Bank putting on 3.7%, Westpac adding 0.8% and the Commonwealth Bank shedding 0.02%.

The retailers were mixed, with Wesfarmers adding 1.3%, Woolworths picking up 1.4%, David Jones adding 3.3% and Harvey Norman losing 0.3%.

The media sector was stronger, with News Corp adding 1.4% and Fairfax gaining 2.7%.