General Growth Still In Talks To Extend $900 Million In Loans
December 15 2008 - 10:43AM
Dow Jones News
DOW JONES NEWSWIRES
Shopping center operator General Growth Properties (GGP) is
still in talks with lenders to extend the deadline on $900 million
in mortgages after negotiations over the weekend failed to produce
a required unanimous agreement.
Shares slid 16% to $1.52 as the uncertainty about the company's
future continues.
Talks over the weekend to extend the loan, which originally was
due Nov. 28 but was extended by two weeks to last Friday, had been
stymied by Citigroup Inc. (C), according to The Wall Street
Journal. While six other lenders in the loan had agreed to a
long-term extension, all must agree for the pact to be
completed.
If no agreement is reached, the company's banks could declare it
in default on that debt, triggering cross defaults on other General
Growth debts and forcing the company to seek bankruptcy
protection.
Citigroup scuttled the real-estate-investment trust's bid last
month for a long-term extension of the debt by demanding changes to
terms on an unrelated $2.6 billion credit line and term loan that
General Growth landed in 2006, people familiar with the matter told
the Journal. Citigroup supplied more than $100 million of that 2006
loan.
In talks over the weekend, Citigroup made additional demands
each time General Growth conceded to other requests, those people
said. The loans are backed by two luxury malls on the Las Vegas
Strip: Fashion Show mall and the Shoppes at the Palazzo.
On Friday, General Growth refinanced almost $900 million in
unrelated debt. The company has amassed a $27 billion debt load
amid an acquisition spree in recent years.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com
(Kris Hudson of The Wall Street Journal contributed to this
report.)
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