Solvency issues face malls’ owner
real estateCompany is owner of three state facilities

By The Associated Press

Published: November 12, 2008

CHICAGO — General Growth Properties Inc. shares plummeted Tuesday 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.

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The real estate investment trust, which is the nation’s second-largest mall owner whose big-name holdings include 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. Making matters worse is another $3.07 billion in property and corporate debt set to come due next year.

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 Tuesday, reaching an all-time low of 33 cents per share before recovering slightly.

Spokesman David Keating couldn’t immediately comment Tuesday.

General Growth shares fell 88 cents to 49 cents per share in trading Tuesday.

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