Reuters Finance News, Australia

(Recasts with company announcement, adds analyst comment)

SYDNEY, April 30 (Reuters) - Centro Properties Group CNP.AX, one of Australia's highest-profile casualties of the global credit crunch, said on Wednesday it has won a seven day extension to a refinancing deadline for A$2.3 billion ($2.1 billion) in debt.

Centro, which owns 700 U.S. shopping malls, borrowed heavily last year to fund a rapid expansion, but ran into trouble when credit markets froze last year, and is under pressure to sell assets to raise cash.

Shares in Centro dropped as much as 6.3 percent after the announcement, recovering slightly to close down 4.2 percent at A$0.455, as some investors worried that the extension was shorter than some had expected.

"It just creates further uncertainty," said ING Investment Management portfolio manager Justin Blaess said.

"The market was hoping it would find out whether there was another six months, which would be a huge positive because it would really give them a fair amount of time to continue to sort this situation out, or whether they were going to put into administration."

Centro and its affiliates together have to refinance some A$5.4 billion of debt.

Centro spokesman Mitchell Brown said the latest extension to May 7 covered A$2.3 billion in loans from Australian lenders that were due to expire on Wednesday, as well as US$450 million in U.S. private placement notes.

Centro's main local bankers are Australia and New Zealand Banking Group Ltd (ASX: ANZ.ax) , Commonwealth Bank of Australia Ltd (ASX: CBA.ax) , National Australia Bank (ASX: NAB.ax) and St. George Bank Ltd (ASX: SGB.ax) .

It also has U.S. bank creditors including JP Morgan JPM.N and Bank of America BAC.N.

About two-thirds of Centro's shopping centres are in the United States, with the remainder in Australia and New Zealand. It holds the assets through a complex network of managed funds.

Centro said earlier this week it was seeking bids for 25 of its shopping centres, but hopes to retain at least 50 percent ownership in them to retain management and leasing control.

It had previously said its adviser, Lazard Carnegie Wylie, reported extensive interest from potential investors and it expected a number of parties to start due diligence soon.

"The recapitalisation plan, which is the asset sale, isn't going to happen overnight, so it needs a stay of execution from the bankers so they can concentrate on recapitalising the company," said ING's Blaess.

The stock has fallen by about 90 percent since it first revealed debt problems in mid-December. ($1=A$1.07) (Reporting by Ben Wilson; Editing by Louise Heavens)