General Growth to take charge for Hughes spinoff

By Reuters
Posted Nov. 16, 2010 at 5:32 p.m.

General Growth Properties Inc., which emerged from bankruptcy last week, said it expects to take a $537 million noncash charge in connection with the spinoff of the Howard Hughes Corp.

The noncash charge of $1.68 per share will reflect the difference between the company’s carrying value of the assets that were put into Howard Hughes and the market value of the assets.

The $1.68 per share was based on 319 million shares of common stock outstanding on the spinoff date. Since then, however, General Growth has issued shares to its investors and launched a public offering and will have about 940 million shares outstanding.

Shares of General Growth on Tuesday closed at $14.31, down 7 percent, while the benchmark MSCI U.S. REIT Index .RMZ was off 3.4 percent.

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