Mills reaches agreement with Kan Am on joint ventures

By Lisa Kerner

Charlotte, N.C., Jan. 5 - The Mills Corp. and The Mills LP entered into a term sheet on Dec. 27 with Kan Am to resolve issues surrounding the companies' joint ventures, according to an 8-K filing Friday with the Securities and Exchange Commission.

Mills also noted that Mills LP's ownership interest in Pittsburgh Mills was redeemed for net proceeds of $8.5 million which were used for a $4 million settlement payment and to pay down the senior term loan with Goldman Sachs. The redemption reduced the joint venture consolidated debt by the $123.7 million amount of the Pittsburgh mortgage loan.

Under the term sheet agreed with Kan Am:

• Mills Corp. and Mills LP agreed to make a capital contribution of no more than $60 million but no less than $55 million to the St. Louis Mills partnership to pay down the existing secured debt of $56.4 million;

• The $10.5 million in preferred returns owed to Kan Am for St. Louis Mills and Discover Mills will be paid quarterly through Dec. 31, 2007;

• Mills Corp. and Mills LP agreed to make additional capital contributions of $20 million to the St. Louis Mills and Discover Mills partnerships to reduce debt or fund project improvements at Kan Am's discretion;

• The parties agreed that the Katy Mills partnership will use the proceeds from a pending land sale to repay a $20 million inter-company loan made by Mills Corp. and Mills LP and to pay Kan Am one year of its priority return.

Mills is an Arlington, Va.-based developer, owner and manager of retail destinations

Kan Am, a German syndicator of closed and open-end real estate funds,

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