GGP Remains on Target to Emerge from Chapter 11 in October 2010 with Strong Financial Foundation and Clear Strategic Plan
CHICAGO, IL (August 2, 2010) — General Growth Properties, Inc. (NYSE: GGP) today announced it has filed an Amended Plan of Reorganization, Disclosure Statement and amended Investment Agreements with the United States Bankruptcy Court for the Southern District of New York.
As previously announced, the Investment Agreements with affiliates of Brookfield Asset Management, Fairholme Capital Management and Pershing Square Capital Management (“Sponsors”) provide $8.55 billion of capital commitments to GGP in connection with its plan for emergence from Chapter 11. In addition, the Teacher Retirement System of Texas, a public pension plan, has agreed to invest $500 million in shares of New GGP common stock at $10.25 per share, which will replace the Sponsors’ $500 million equity backstop.
The key modifications to the Plan of Reorganization and Investment Agreements include:
“We are very pleased with our ability to continue to enhance the Investment Agreements and our capital structure for the benefit of the company and its stakeholders,” said Thomas Nolan, president and chief operating officer of GGP. “The amended clawback rights enhance our ability to sell $1.9 billion of equity at higher prices than committed by the Sponsors in the original Investment Agreements, market conditions permitting. We have also improved our flexibility to manage our balance sheet and access the capital markets. We remain on track to emerge from Chapter 11 in October and continue to build on our leadership position in the industry. At the same time, these modifications enhance Spinco’s ability to maximize value for its stakeholders.”
The full Amended Plan of Reorganization and accompanying Disclosure Statement can be found here.
The Bankruptcy Court has set the hearing to consider approval of the Disclosure Statement for August 19, 2010, at 10:00 am EDT. Following Bankruptcy Court approval of the Amended Disclosure Statement and related voting solicitation procedures, GGP will solicit acceptances of the Plan and seek its confirmation by the Bankruptcy Court.
UBS Investment Bank and Miller Buckfire & Co. LLC are serving as financial advisors to General Growth Properties, and Weil, Gotshal & Manges LLP and Kirkland & Ellis LLP are acting as legal counsel to the Company.
GGP currently has ownership interest and management responsibility for more than 200 regional shopping malls in 43 states, as well as ownership in planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. The Company’s common stock is traded on the New York Stock Exchange under the symbol GGP.
With respect to GGP’s efforts to raise equity capital to replace some or all of the Pershing Square, Fairholme and Texas Teachers commitments, as noted, the Company has filed a registration statement relating to these securities with the Securities and Exchange Commission. The securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell these securities.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, our ability to successfully complete our plan of reorganization and emerge from bankruptcy, our ability to refinance, extend, restructure or repay our near and intermediate term debt, our substantial level of indebtedness, our ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, our liquidity demands and retail and economic conditions. Readers are referred to the documents filed by General Growth Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements.