General Growth Properties (GGP), the US’s second largest shopping centre owner, has filed for bankruptcy protection with $27bn (£18.1bn) of debt.
In what is believed to be the largest real estate bankruptcy action in US history the company, 158 of its regional shopping centres and a number of other subsidiaries have filed for protection.
The company, which owns 200m sq ft of retail space in the US, said it is looking to exit bankruptcy protection as quickly as possible by reducing and restructuring its debt.
GGP’s debt problems stem from its purchase in 2004 of commercial property developer Rouse Co for $11.3bn (£7.6bn).
Adam Metz, GGP’s chief executive, said: ‘Our core business remains sound and is performing well with stable cash flows.
‘We believe that chapter 11 is the best process for restructuring maturing mortgage loans, reducing the company’s corporate debt, and establishing a sustainable, long-term capital structure for the company.’
‘While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of chapter 11.’
GGP also announced it has secured a $375m (£252m) financing facility from Pershing Square Capital Management which, when approved by the bankruptcy court, will provide the company with funds for the duration of the chapter 11 process.