General Growth investor Simon gets $1.1 billion more in commitments

By Caroline Salls

Pittsburgh, April 21 - General Growth Properties, Inc. proposed investor Simon Property Group, Inc. has received $1.1 billion in new capital commitments from ING Clarion Real Estate Securities, Oak Hill Advisors, RREEF and Taconic Capital Advisors to support a recapitalization of General Growth, according to a Simon news release.

Simon said these commitments are in addition to its previously announced $2.5 billion proposed investment and a $1 billion co-investment commitment by Paulson & Co.

Simon said its firm, fully financed proposal would be at the same per-share price as the Brookfield-sponsored proposal, but without the expensive and highly dilutive equity warrants that General Growth proposes to issue to Brookfield, Pershing Square and Fairholme Capital.

"This is a highly sophisticated collection of investors with a deep knowledge of the real estate industry," Simon chairman and chief executive officer David Simon said in the release.

"Their participation further underscores the fact that dilutive warrants required by Brookfield, which could cost GGP shareholders $895 million, are unnecessary and unfair to GGP's current shareholders.

"We are continuing to have productive discussions with additional parties interested in co-investing in GGP without requiring these costly warrants."

"Our proposed recapitalization would result in a new GGP with less concentrated ownership among a diverse group of investors, including dedicated, real-estate focused institutions with a longer-term investment outlook and who are better positioned to support the future growth of the company."

General Growth, a Chicago-based real estate investment trust that owns regional shopping malls, master planned community developments and commercial office buildings, filed for bankruptcy on April 16, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-11977.

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