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Shares in Centro Properties Group, Australia's second high-profile victim of the global credit squeeze, fell as much as 23 per cent today following a negative newspaper report.
The Australian newspaper reported the troubled firm has held talks with the corporate regulator, in an article based on a conversation overheard in the regulator's foyer.
The newspaper said the meeting was probably about Centro's accounting in the lead-up to disclosure last month it was having trouble refinancing A$1.3 billion ($1.5 billion) in debt.
A spokeswoman for the Australian Securities and Investments Commission declined to comment on the report.
Centro shares were trading down 19.8 per cent to A$0.89 at 0130 GMT and it was the most actively traded stock on the exchange.
"What it comes down to is no one has any idea what it's actually worth," said an Australian fund manager who asked not to be identified.
"The valuation is extremely sensitive to changes in valuation in US (property markets), which keep declining," he said. He attributed most of the recent activity in Centro to hedge funds and day traders.
One of Centro's largest shareholders, UBS AG unit UBS Asset Management, said this week it had reduced its stake in the property group to less than 5 per cent. Its shareholding had risen to 8.6 per cent two weeks ago.
Shares in Centro plunged 86 per cent in the two days after it said on December 13 it was having trouble refinancing debt as a result of the global credit squeeze.
It has opened the door to potential bidders and banker Lazard Carnegie Wylie is reported in local media to have provided confidential information to interested parties.
Lazard said in an email to Reuters that it was not commenting on the review process.
- REUTERS
