Centro Properties Group (CNP) said it had reviewed a number of proposals for new equity but none of the offers provided an acceptable outcome. The group also said assets sales alone would not provide a long term solution to debt reduction.
The highest profile Australian victim of the US subprime crisis took another 10% hit following the statement on Monday. The company has already lost around 90% since first revealing problems over debt late in 2007.
Centro said that the asset sale program would provide the group with liquidity and some level of debt reduction but nothing substantial.
"In the absence of a recapitalisation solution in the short term, the group's objective therefore is to obtain longer term debt extensions from the lender groups beyond 15 December 2008 to provide a more stabilised environment for the recapitalisation process to be pursued over a longer time frame," the property group said in a statement.
Centro has been granted an extension on outstanding debt to 15 December 2008. US lenders are owed $1.2 billion and Australian lenders are owed $2.3 billion. There is also US$450 million owed to private placement holders in the US.
The firm said it had commenced discussions with the lender groups on possible terms for longer term debt extension and stabilisation of the group.
"It is likely that those terms would include a requirement for the conversion of a portion of debt into some form of hybrid security," Centro advised.
Centro Properties is to release full year financial results to 30 June on 29 August.
At 1158 AEST, Centro Properties was 2c lower at 20c.