posted on July 16, 2010 00:59
A major North Texas mall operator has obtained a $500 million investment commitment from Teacher Retirement System of Texas to help it emerge from Chapter 11 bankruptcy and grow the value of its malls.
Chicago-based General Growth Properties operates malls nationwide, including the Stonebriar in Frisco, The Parks at Arlington, Vista Ridge Mall in Lewisville, Collin Creek Mall in Plano, Circle T Power Center in Westlake and Hulen in Fort Worth.
In exchange for infusing General Growth Properties’ capitalization plan with $500 million, the Austin-based Teacher Retirement System of Texas will receive equity in the reorganized GGP at $10.25 per share, General Growth Properties said in a statement. The retirement system manages retirement funds for Texas teachers.
General Growth’s goal to emerge from Chapter 11 was initially lifted by the company securing investments from Brookfield Asset Management, Fairholme Funds and Pershing Square Capital Management. Those investments included $500 million in equity and a backstop provision for $1.5 billion of debt.
General Growth said since that initial commitment, the company has been looking for other financing options to maximize its value as it emerges from Chapter 11. The Teacher Retirement System of Texas provided it with a new financing option.
The teachers fund will only be invested in the new entity formed after GGP emerges from Chapter 11, which General Growth expects will occur by October. A bankruptcy court must approve the investment.
“The equity investment by TRS is yet another vote of confidence in the future of GGP,” said Adam Metz, CEO of GGP. “We are excited to partner with such an experienced and highly regarded real estate investor that has a proven track record of long-term investments.”
July 12th, 2010 | Keri Panchuk | Dallas Business Journal