General Growth Properties (GGWPQ.PK)

amicidelbosco (< 20) Submitted: 12/13/2008 2:06:41 AM : Start Price: $1.70 GGWPQ.PK Score: +52.93

This company is in deep trouble. It's like a boxer in the corner with its hands down, defenceless. It may not stand up to the year end.
GGP is caught in a deterioating economic environment with retail sales at a low and probably to decline further. Tenants will default on leases and probably will need rent adjustments to merely survive. This will further erode GGP's income and cash flow prospects which are badly needed at this time.
GGP's aggressive expansion has created a 24 biilion LTD which requires 975 million interest payments to service the debt. With an estimated annual loss of 60 million and a projected cash flow of only 200 million it will be extremely difficult to meet its obligations. Presently the current assets to current liabilities are a mere 1 to 2 which poses great difficulty during this recession.
The present housing crises will soon be accompanied by retail business outlet crises. It's starting to look like the "savings and loans" problem of the early 90's for malls and plazas.
GGP has an outside chance if it suspends the dividend payouts(500 mil), reduces its high administrative costs (60 mil), reduce its estimated annual capital expenditures (880 mil) and dispose of unproductive assets. Then and only then can it avert a TKO. GOOD LUCK!