Morgan Stanley takes stake in General Growth

NEW YORK, Dec 2 (Reuters) - Morgan Stanley (MS.N) has taken a 5.1 percent stake in U.S. mall operator General Growth Properties Inc GGP.N, which is struggling to pay off $1.035 billion in debt due by the end of the year.

The stake, which amounts to 13,628,093 shares, was reported in a filing with the Securities and Exchange Commission on Tuesday. It also comes a day after a beneficial holder of a $58 million note agreed to extend a Dec. 1 deadline to Dec. 11.

Last week, the company also received a two-week reprieve on $900 million of loans related to two Las Vega shopping centers, Fashion Show mall and Shoppes at the Palazzo. Those loans faced a Nov. 28 maturity date. The company has put both properties up for sale, along with another Las Vegas mall, but has yet to reach a deal.

Last month, hedge fund manager William Ackman's Pershing Square Capital Management took a 7.5 percent stake, or 20,080,690 shares, in the Chicago-based mall operator.

Meanwhile, the Chicago-based real estate investment trust faces another $3.07 billion in debt maturing next year. General Growth has $21.9 billion of debt maturing by the end of 2012.

Last month, General Growth confirmed it had hired law firm Sidley Austin as bankruptcy counsel and said that it may need to seek bankruptcy protection if it cannot address its debt maturities this year and next.

Green Street Advisors analyst Jim Sullivan has argued that if the company files for bankruptcy protection, its equity owners may still receive something because of the high value of its malls.

Shares of General Growth on Tuesday closed at 94 cents. The company's shares have lost 97.7 percent of their value. (Reporting by Ilaina Jonas; Editing by Gary Hill)