Gen'l Growth Thrown a Lifeline

The 2nd-largest shopping mall owner in the U.S., General Growth Properties, Inc. (GGP - Analyst Report) has been granted a 2-week extension on $900 million in mortgage loans. The company had floated the idea of filing for bankruptcy protection following dismal 3rd quarter results last month. Is the extension enough to save the company?

In mid-November, when General Growth Properties, Inc. was trading around 35 cents per share, Zacks senior real estate investment trust (REIT) analyst Greg Sukenik forecast the following: "There are four possible scenarios 1) GGP will file for bankruptcy 2) the company will be sold outright 3) the company will get a large equity infusion that will dilute current shareholders, 4) the company will be able to sell assets and extend debt at it becomes due...

"...We see no point is selling now; we recommend investors hold the shares in the hopes that agreements can be worked out with lenders and near-term debt can be extended and or assets sold." Score one for debt extension.

General Growth shares are down around 90% since the credit crisis shook Wall Street in late September, but have rebounded 10% as the market opened Monday.