General Growth Properties raises doubts about survival

NEW YORK, Nov 11 (Reuters) -- General Growth Properties Inc. GGP.N, the second-largest U.S. mall owner, said that its looming near-term debt raises doubts that it could continue operating and it would consider turning to the courts to protect the company from its creditors.

The Chicago-based retail property company faces $1.13 billion in debt by the end of the year, including $900 million in secured mortgage debt on the two of its Las Vegas shopping centers due on Nov. 28 and $58 million of corporate debt due on Dec. 1.

It also faces another $3.07 billion due next year, the company said on Monday in filing with the U.S. Securities and Exchange Commission.

Although the company is working with its syndicate of lenders to extend the Nov. 28 deadline for the mortgages on the Las Vegas malls -- Fashion Show and The Shoppes at The Palazzo -- and is reviewing strategic alternatives to generate capital including asset sales and corporate capital infusions, it said it is facing an uphill battle given the constrained global capital markets.

"Given the continued weakness of the retail and credit markets, there can be no assurance that we can obtain such extensions or refinance our existing debt or obtain the additional capital necessary to satisfy our short term cash needs on satisfactory terms," the real estate investment trust said in the filing.

"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."

"Our potential inability to address our 2008 or 2009 debt maturities in a satisfactory fashion raises substantial doubts as to our ability to continue as a going concern."

If General Growth fails to refinance or extend the $900 million of property secured debt, it could trigger a default under its senior credit facility and its $1.75 billion secured portfolio facility it secured in July, it said.

The failure to refinance or extend the $58 million of corporate debt would also trigger an event of default under its secured portfolio facility and some of its bonds, the company said in the filing.

Although the company has three of its Las Vegas malls up for sale, the sagging U.S. economic and spending pullback by consumers may lead to a rise in tenant bankruptcies and that could "reduce the value of our properties, reducing the likelihood that we would be able to sell such properties, on attractive terms or at all," it said.

Shares of General Growth on Monday closed down 34 percent at $1.37. About a year ago, the stock sold for as high as $51.24. (Reporting by Ilaina Jonas; Editing by Kazunori Takada) ilaina.jonas@reuters.com 1-646-223-6193)