Saturday, November 07, 2009
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General Growth Properties risks default
By Ashley M. Heher
Associated Press
POSTED: 01:42 p.m. HST, Nov 11, 2008
CHICAGO >> General Growth Properties Inc. shares plummeted today after the mall owner warned it faces solvency trouble and may be forced to file for bankruptcy if it can't refinance or extend nearly $1 billion in debt due next month.
The real estate investment trust, is the nation's second-largest mall owner whose big-name holdings include Ala Moana and Ward centers in Hawaii, as well as Chicago's Water Tower Place and Fashion Show in Las Vegas, also disclosed in a regulatory filing late Monday that it may default on certain debt obligations.
General Growth also owns Mall St. Matthews and Oxmoor Center in Louisville, Ky.; Florence Mall in Florence, Ky.; Greenwood Mall in Bowling Green, Ky.; Kingsport Towne Center in Kingsport, Tenn.; Northgate Mall in Chattanooga, Tenn.; Kenwood Towne Centre in Cincinnati; and River Falls in Clarksville, Ind., across the Ohio River from Louisville. Stones River Mall in Murfreesboro, Tenn., is listed on the company's Web site as a third-party managed mall. Making matters worse is another $3.07 billion in property and corporate debt slated to come due next year. "Given the continued weakness of the retail and credit markets, there can be no assurance that we can obtain such extensions or refinance our existing debt or obtain the additional capital necessary to satisfy our short-term cash needs on satisfactory terms," the Chicago-based REIT said in filing with the Securities and Exchange Commission. "... Our potential inability to address our 2008 and 2009 debt maturities in a satisfactory fashion raises substantial doubts as to our ability to continue as a going concern." General Growth, beset by falling funds from operations and plagued by a tightening global credit market that's making it difficult for companies to obtain financing, is trying to sell off properties and cut costs to weather the rocky economic climate. It's also suspended its dividend and ousted a cadre of top executives. But that hasn't calmed investors, who've sent the company's shares into a virtual free-fall since September. After filing the quarterly report late Monday, the company's shares shed another 76 percent today, reaching an all-time low of 33 cents per share before recovering slightly. Spokesman David Keating couldn't immediately comment. Citigroup analyst Michael Bilerman said General Growth's equity holders may still be at risk, even the company opts not to file for bankruptcy protection. "There is no quick fix in the current capital-constrained environment," he told investors late Monday night. General Growth shares fell 92 cents, or 67 percent, to 45 cents per share in mid-afternoon trading today.
CHICAGO >> General Growth Properties Inc. shares plummeted today after the mall owner warned it faces solvency trouble and may be forced to file for bankruptcy if it can't refinance or extend nearly $1 billion in debt due next month.
The real estate investment trust, is the nation's second-largest mall owner whose big-name holdings include Ala Moana and Ward centers in Hawaii, as well as Chicago's Water Tower Place and Fashion Show in Las Vegas, also disclosed in a regulatory filing late Monday that it may default on certain debt obligations.
General Growth also owns Mall St. Matthews and Oxmoor Center in Louisville, Ky.; Florence Mall in Florence, Ky.; Greenwood Mall in Bowling Green, Ky.; Kingsport Towne Center in Kingsport, Tenn.; Northgate Mall in Chattanooga, Tenn.; Kenwood Towne Centre in Cincinnati; and River Falls in Clarksville, Ind., across the Ohio River from Louisville. Stones River Mall in Murfreesboro, Tenn., is listed on the company's Web site as a third-party managed mall. Making matters worse is another $3.07 billion in property and corporate debt slated to come due next year. "Given the continued weakness of the retail and credit markets, there can be no assurance that we can obtain such extensions or refinance our existing debt or obtain the additional capital necessary to satisfy our short-term cash needs on satisfactory terms," the Chicago-based REIT said in filing with the Securities and Exchange Commission. "... Our potential inability to address our 2008 and 2009 debt maturities in a satisfactory fashion raises substantial doubts as to our ability to continue as a going concern." General Growth, beset by falling funds from operations and plagued by a tightening global credit market that's making it difficult for companies to obtain financing, is trying to sell off properties and cut costs to weather the rocky economic climate. It's also suspended its dividend and ousted a cadre of top executives. But that hasn't calmed investors, who've sent the company's shares into a virtual free-fall since September. After filing the quarterly report late Monday, the company's shares shed another 76 percent today, reaching an all-time low of 33 cents per share before recovering slightly. Spokesman David Keating couldn't immediately comment. Citigroup analyst Michael Bilerman said General Growth's equity holders may still be at risk, even the company opts not to file for bankruptcy protection. "There is no quick fix in the current capital-constrained environment," he told investors late Monday night. General Growth shares fell 92 cents, or 67 percent, to 45 cents per share in mid-afternoon trading today.
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