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General Growth to get $3.9B in new funding


St. Louis General Growth Properties has received proposals to obtain an additional $3.9 billion from two separate investment firms, an infusion of capital the company hopes will help speed its reemergence from Chapter 11 bankruptcy protection.

Pershing Square Capital Management, one of General Growth’s largest equity holders, and FairholmeCapital Management LLC, one of its largest unsecured creditors, offered up the funds at a value of $15 per share.

General Growth filed for bankruptcy in April 2009.

Under the terms of the deal, $3.8 billion would be used to purchase shares of General Growth stock at $10 a share.

General Growth, the nation’s second-largest mall owner, said it believes it now has “substantially all of the cash required to fulfill the company’s capital needs in connection with its emergence from bankruptcy.”

The deal would be in addition to General Growth’s Feb. 24 announcement that Brookfield Asset Management has agreed to provide the company with $2.6 billion in equity. Both agreements need approval from General Growth’s board of directors and U.S. Bankruptcy Court.

“The proposal from Fairholme and Pershing Square builds on the significant momentum we have created to return GGP to a strong financial foundation for the future,” General Growth CEO Adam Metz said in a statement.

In connection with the deal, Pershing Square founder and trustee Bill Ackman has resigned from General Growth’s board of directors, according to the St. Louis Business Journal.

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