The Teacher Retirement System of Texas (TRS) will invest $500 million in exchange for equity in reorganized General Growth Properties (GGP) at $10.25 per share.
The agreement, subject to bankruptcy court approval, would enhance GGP’s expected capital structure as it emerges from Chapter 11.
GGP’s initial investment agreements with Brookfield Asset Management, Fairholme Funds, and Pershing Square Capital Management provide sufficient capital for the firm to emerge from Chapter 11 and include a backstop provision for $1.5 billion of debt and $500 million of equity.
The new investment by TRS will be in the equity of reorganized GGP only and will not include any interest in the newly formed company that will be spun-off to GGP shareholders after emergence.
“The equity investment by TRS is yet another vote of confidence in the future of GAP,” said Adam Metz, CEO of GGP. “We are excited to partner with such an experienced and highly regarded real estate investor that has a proven track record of long-term investments.”
“We are very pleased to make this significant equity investment in GGP,” said Steve LeBlanc, senior managing director of private markets at TRS. “We believe our investment in GGP offers us a unique opportunity to obtain a significant position in a large and diversified portfolio of high-quality assets with a solid capital structure, an excellent management team and clear operating strategy.”
GGP has owns and manages more than 200 regional shopping malls in 43 states, and has ownership in planned community developments and commercial office buildings.
TRS delivers retirement and related benefits authorized by the Texas legislature and manages the $96.7 billion trust fund established to finance member benefits.