General Growth to ask bondholders for extension: report

09/03/2009 - 6:30

(Reuters) - Mall giant General Growth Properties Inc intends on Monday to begin formally soliciting holders of $2.3 billion of its bonds to grant it another nine months of breathing room as it juggles its debts and strives to avoid bankruptcy, the Wall Street Journal said.

General Growth will start a so-called consent solicitation requesting that each bondholder abstain from demanding payment of principal and interest on the debt for the balance of this year, though interest will continue to accrue, the paper said, citing people familiar with the matter.

General Growth needs the vast majority of its bondholders to agree to the deal so that it can stay out of bankruptcy court, the paper said.

The company has a debt load of $27 billion, including $395 million in bonds coming due March 16 and another $200 million in April, the paper said, adding that the company lacks the cash or borrowing capacity to pay or refinance its debts as they come due.

General Growth could not be reached for comment by Reuters.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Mike Nesbit)