General Growth shares dive

Associated Press

November 12, 2008

General Growth Properties Inc. shares plummeted yesterday after the nation's second-largest 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, which owns several Baltimore-area malls and is Columbia's master developer, also disclosed in a regulatory filing late Monday that it might default on certain debt obligations. General Growth's big-name holdings include Chicago's Water Tower Place and Fashion Show in Las Vegas. 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 a tightening global credit market that's making it difficult for companies to obtain financing, is trying to sell off properties and cut costs. It has also suspended its dividend and ousted a cadre of top executives. But that hasn't calmed investors, who've sent company shares into a free-fall since September.

After filing the quarterly report late Monday, the company's shares shed another 66 percent yesterday, or 88 cents, reaching an all-time low of 33 cents per share before recovering slightly. They closed at 49 cents.

Spokesman David Keating couldn't immediately comment yesterday.

General Growth owns Harborplace & the Gallery, The Village of Cross Keys, Mondawmin Mall, The Mall in Columbia, Towson Town Center, Owings Mills Mall and White Marsh Mall.