Centro's near-death experience
CENTRO Properties will now move to its next phase of being a debt-free, simply structured retail landlord, after its court battle with PricewaterhouseCoopers was withdrawn.
CENTRO Properties will now move to its next phase of being a debt-free, simply structured retail landlord, after its court battle with PricewaterhouseCoopers was withdrawn.After close to four years of battling to stay alive, Centro was given the green light to move ahead after PwC backed down from appealing against the NSW Supreme Court's decision on the merger.Yesterday, the former embattled Centro Properties was suspended from trade.On Monday, it will list on the ASX on a deferred delivery basis, and from December 15 it will be reborn as the new $3.4 billion Centro Retail Australia.After gaining the court's approval on Thursday, PwC called for a stay of execution to read the judgment and decide whether to appeal. That was granted by Justice Ian Barrett.But at the 11th hour, PwC pulled out of the action, which Centro's chief executive, Robert Tsenin, said could have caused some reputation damage.PwC forced the court action after it objected to the Centro scheme, which included a payment of $49.8 million to Centro equity holders, but left only $10 million for very significant contingent liabilities arising from the class action."Since August PwC had been requesting information to address its concerns, but this had not been forthcoming," the firm said in a statement. "As a result, PwC felt obliged to contest the scheme and seek the court's adjudication upon it. The issues raised by PwC were significant and complex and this was recognised by the court."Now having received that adjudication and considered his honour's reasons, PwC has chosen not to appeal." Mr Tsenin told reporters he was delighted with the outcome and it was now time to put the past behind the group and look to a positive future for the new-look Centro."We can now focus on implementing the aggregation scheme to make the group debt-free and add value for investors," he said. "As for the court action, I think PwC will have to live with the consequences of their decisions."They failed, and it's up to the market as to how it reacts."When asked if he felt PwC had damaged its reputation, Mr Tsenin said: "They must have."
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