Centro will vigorously defend lawsuit

Centro Properties Group Ltd and Centro Retail Group Ltd say they will vigorously defend a class action claim brought against them.

"Centro will vigorously defend the proceeding in the interests of its securityholders," Centro Properties Group said in a statement.

The class action has been brought against the troubled property group, and CPT Manager Ltd - the responsible entity (RE) for Centro Property Trust - in the Federal Court in Melbourne.

On Friday, listed litigation funder IMF Australia Ltd said it had filed a shareholder class action against the property fund with a claim value of at least $100 million.

"The claims relate to alleged misleading and deceptive conduct and breaches by (Centro) of its continuous disclosure obligations between 9 August 2007 and 15 February 2008," IMF said on Friday.

The shareholder claim, pursued by legal firm Maurice Blackburn, will seek compensation over the price paid for securities inflated by Centro's alleged failure to properly disclose its circumstances.

"Last month, the maximum claim value was $100 million," IMF said on Friday.

"But since then "the claim value has increased materially."

Last week, Centro was thrown another lifeline by its lenders with debt maturities now extended to December 15, including $2.3 billion owed to a syndicate of Australian banks and $US450 million ($A478.06 million) owed to US private placement noteholders.

Centro and some of its subsidiaries have provided security for the debt by way of fixed and floating charges and some US real estate.

To close the debt deal, a series of conditions must be met by May 30, including Centro's creditors establishing a consent process for refinancing and how proceeds from asset sales are distributed.

As well, by May 30, Centro must have finalised a $155 million "liquidity facility" to pay for capital expenditure, adviser fees and higher lender costs.

Also tied to last week's announcement is another two obligations of $US1.1 billion each ($A1.2 billion), owed by Centro and Centro Retail Trust on their US joint venture, which will also be pushed back to the December 15 deadline from September 30.

The rollover of that joint venture debt also is contingent on the conditions set out in the deal being inked by the May 30 deadline.

Centro's troubles became dramatically apparent last December, sending its shares tumbling 80 per cent, when it announced it was struggling with the leverage on its 800-strong property portfolio spanning Australia, New Zealand and the US.

As part of its survival plan, Centro is fielding offers for two of its unlisted property portfolios, the Australia Wholesale Fund and its America Fund.

In March, IMF managing director John Walker said more transparency was needed in a market that lacked liquidity.

He said Centro had failed to disclose its short-term debt and, when it was disclosed, the price of the stock dropped significantly.

Mr Walker said investors would not have bought the stock during the non-disclosure period had they been fully informed.