Southpoint parent company in financial trouble

Posted November 12, 2008 2:55 p.m. EST
Updated November 12, 2008 9:06 p.m. EST

— General Growth Properties Inc., the parent company of Durham's The Streets at Southpoint and almost 200 shopping centers nationwide, faces a debt deadline that could force the company to seek bankruptcy protection, according to a filing with the Securities and Exchange Commission.

David Keating of General Growth Properties offered reassuring words Wednesday to Durham-area shoppers and Southpoint store owners. He said The Streets at Southpoint and other facilities will not be affected by the financial situation at the parent company.

General Growth Properties, which is based in Chicago, has $958 million in debt that comes due Dec. 1 and another $3 billion in debt that matures in 2009. The company outlined a plan Tuesday to extend those deadlines and raise the cash to stay in business. The filing said that, should those efforts fail, bankruptcy is an option.

"In the event that we are unable to extend or refinance our debt or obtain additional capital on a timely basis and on acceptable terms, we will be required to take further steps to acquire the funds necessary to satisfy our short-term cash needs, including seeking legal protection from our creditors," the filing said.

Pat Anderson, general manager of The Streets at Southpoint, did not anticipate a change in Durham. He said the shopping center is "very successful" and that stores there are safe.

Keating said after the debt deadline in December, the company will have more to say about changes at current properties or delays to those in development.

The Triangle Business Journal and the Wall Street Journal reported Wednesday that Standard and Poor’s would drop General Growth Properties from its benchmark S&P 500 Index at the close of business Wednesday. The company's third quarter financial statement showed operating funds decreased by 11 percent from a year ago.

General Growth Properties is a real estate investment trust whose shares are publicly traded. Its price dropped more than 18 percent Wednesday on the news of its debt problems.

Since a year ago, the share price has varied from a high of $51.24 to a low of 24 cents.