The largest mall owner in Maryland and the second largest mall owner in the US has finally declared bankruptcy. General Growth Properties(GGP) has fought off bankruptcy for months but could no longer hold off its creditors. General Growth has amassed over 27 billion in debt from acquisitions and other financing loans. The acquisition of Rouse Company doomed the once promising company. Much of GGP’s growth was fueled by debt financing at low interest rates. When the credit markets froze up last year GGP found themselves unable to obtain capital at a time when it was sorely needed. The company failed in its attempts to renegotiate its agreements with its creditors. General Growth has a number of favorable properties that competitors will glady acquire at reasonable prices.
The future of General Growth Properties
December 11, 2008 By Leave a Comment
Bill Ackerman, hedge fund manager of Pershing Capital, has been raising his stake in distressed mall owner General Growth Properties (GGP). I already commented on General Growth’s financial problems in an earlier post. General Growth is trying to stave off bankruptcy by restructuring debt that is due in the near term. Given its financial position there is no fundamental reason to invest in GGP. The stock is currently trading at $1.60. This might ibe an interesting speculative play if they can find a way to avoid bankruptcy.
