Plano Star-courier > News
General Growth Properties Inc. faces possible bankruptcy
By Heather M. Smith, Staff Writer
General Growth Properties Inc. (GGP), owner of Collin Creek Mall and Stonebriar Centre, may be forced to seek bankruptcy protection from its creditors if its debt can't be extended or refinanced. Both malls will remain open for business, officials said.
"All of our malls will remain open," said David Keating, director of corporate communications for GGP. "Regardless of what happens, the individual malls won't close."
The Chicago-based GGP has $1 billion in debt, which is due next month, and another $3.07 billion in property and corporate debt due next year. The company, which owns 15 shopping centers and malls in Texas, said it may default on the loans.
"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," said GGP 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."
The filing came late Monday, sending the company's shares into a downward spiral. Shares of GGP fell for the second consecutive day Wednesday and Standard and Poor said it was removing the company's stock from the S&P 500 index. GGP stock fell nine cents to close at 39 cents a share on Wednesday, equalling a 20-percent reduction in the value of the stock. The company's stock once traded at a 52-week high of $51.24 per share.
General Growth Properties acquired Columbia, Md.-based Rouse Co. in 2004 for $7.2 billion and assumed $5.4 billion in Rouse debt as part of the deal.
GGP is trying to combat its situation by selling off properties and cutting costs in order to withstand the economy. The company also halted its dividends and let go some top executives, but investors are still concerned, partly because GGP reported a quarterly loss of $15.4 million, officials said.
Officials from Collin Creek Mall could not be reached Wednesday.