Glenn Rufrano has proved to be something of a skilled sailor by keeping the battered Centro afloat and maintaining a steady course in some pretty heavy weather.

Rufrano is actually a diving enthusiast keen on exploring the shipwrecks of treacherous waters in the Bahamas called Walkers Cay. He was appointed CEO of Centro last January with the task of preventing Centro from becoming a shipwreck in its own right.

Centro struck trouble late last year when financial markets started to tighten and the shopping centre owner’s portfolio came under scrutiny when it was attempting to refinance some of its debt.

Centro had been expanding rapidly with acquisitions in Australia and the United States over a number of years, funded by both long and short term debt facilities, with loans secured against ever-increasing property valuations.

The company struck problems when short term debt rollovers became a more difficult proposition in late 2007 and when financiers started to question whether or not the property valuations were inflated.

Centro’s troubles worsened when its sharemarket price sunk, depleting equity and reducing further the company’s ability to negotiate on its debt.

The management who had built Centro into a formidable shopping centre owner in Australia and the US were thrown overboard and Rufrano took over a business that could well have sunk without trace, especially given the way in which global financial markets have deteriorated this year.

Rufrano had joined Centro in April 2007 as part of the US$6.2 billion acquisition of the New York-based New Plan Excel Realty Trust. He had been CEO at New Plan since 2000 and effectively became Centro’s head in the US last year.

Appointing Rufrano as CEO of the troubled group was something of a risk given that a fair measure of Centro’s problems were associated with the US property acquisitions.

US sources tell Fair Margin the shopping centre industry was astonished at the prices paid by Centro for many of the assets it bought. In one case, Centro bid twice as much as an experienced local developer for one property.

That industry talk was a large part of the company’s problem when it attempted to roll over loans late last year.

The financiers had heard the talk and wondered about the risk associated with the Centro portfolio and its valuations.

Centro had lost the confidence of financiers, analysts and shareholders and was doomed when Rufrano took over as CEO.

The company could easily have become a shipwreck within weeks had it not been for Rufrano’s ability to secure and retain support for a rescue plan that included a restructure of Centro’s entities and asset sales to reduce its debt exposure.

Centro owes around $17.4 billion with $1.36 billion due for repayment to one consortium of five American banks by December 15. One of those banks, Wachovia, was set to be taken over last week as part of the continuing mayhem in US finance markets, before a judge blocked the deal over the weekend.

Rufrano has shown remarkable courage withdrawing one shopping centre from one much-needed sale because the price would have sent a distressed sale message to the market.

Rufrano has been adamant that Centro is not interested in a fire sale with the divestment of some of its best assets at low prices and, despite the tsunami that has hit Wall Street and global financial markets in recent weeks, he has retained support from financiers for that strategy.

No doubt, Centro and Rufrano owe a large slice of gratitude to Australian banks that have not been as alarmed about the shopping centre company’s shareprice nosedive as might have been expected.

The Australian banks would seem to have more secure positions in respect of their loans to Centro and a greater confidence in the quality of the Australian property portfolio which is worth around $9 billion.

But their support has been crucial to Rufrano’s need to buy time for an orderly and sensible sale of assets

There have been a number of setbacks, including the collapse of an $880 million deal to sell the Centro America Fund in September when, it is understood, Rufrano refused to sell at a lower price than had been agreed in July with the buyer, believed to be DRA Advisors.

Centro also booked a $345 million writedown on its US investments for the June quarter through an entity called Centro NP.

But Centro did realise $157.5 million for the sale of two properties in New Zealand as well as Centro Southport in Queensland and properties in South Australia.

Each of the sales was completed on modest discounts on June 30 book values for the properties.

Rufrano secured an extension of the $1.6 billion debt facility from September to December but the Wachovia takeover could well make the pre-Christmas debt repayment deadline a fixed commitment.

More importantly, another $4 billion in debt is due to be repaid in December under other loan commitments

Rufrano is attempting to hammer out a debt for equity deal that would see the banks waive debt in return for securities that could be converted to shares in up to three years.

He believes the debt for equity proposal is a better option than distressed sales of assets that, in turn, could see nervous financiers call in remaining loans and, quite possibly, sink the company and leave everyone with substantial losses.

One of Rufrano’s problems in negotiating with already skittish banks is the uncertainty associated with class actions brought by two Melbourne legal firms, Slater & Gordon and Maurice Blackburn, on behalf of Australian shareholders.

The two class actions are based on disclosure issues and represent a $1 billion plus claim on Centro.

The company was highly recommended by financial planners for share portfolios but the scrip is now languishing amidst the penny dreadfuls.

Rufrano’s biggest problem is that he really has no control over the stormy conditions in global financial markets that make Centro’s options less predictable.

The survival of the shopping centre group remains at the mercy of the global storms even though Rufrano has to date kept his shop afloat and kept the sharks at bay.