Report: General Growth To Sell $2B in Preferred Stock

(Reuters) – General Growth Properties Inc., the No. 2 U.S. mall owner, is trying to sell up to $2 billion in preferred shares to private-equity firms, hedge funds and other investors in a bid to lower its debt burden, the Wall Street Journal reported.

The company’s bankers at Goldman Sachs Group Inc (GS.N) have approached Blackstone Group LP (BX.N), Colony Capital LLC and Vornado Realty Trust, the paper quoted people familiar with the situation as saying.

It was unclear if the preferred shares offered could eventually be converted to common stock, or if any takers for the offer were found, the paper added.

Goldman banker Byron Trott, who recently brokered similar sales of preferred shares for Goldman and General Electric Co (GE.N) to Warren Buffett’s Berkshire Hathaway Inc (BRKa.N), is leading the effort, the paper reported.

General Growth is facing about $1.2 billion of loans maturing in mid-November, with two of its Las Vegas properties, Fashion Show mall and The Shoppes at The Palazzo, accounting for $900 million of the debt coming due.

In late September, the company had said that it would explore raising capital on a corporate level as opposed to a property level.

A General Growth spokesman told the paper that the company was actively pursuing all alternatives, while Goldman declined to comment.

General Growth, Vornado, Blackstone, Colony Capital and Goldman could not be immediately reached for comment by Reuters.

(Reporting by Savio D’Souza in Bangalore; Editing by Paul Bolding)