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Westfield Group to Raise A$2.9 Billion to Pay Down Debt

Business Materials 3 February 2009 05:14 (UTC +04:00)

Westfield Group, the world's biggest shopping-center owner by market value, will raise A$2.9 billion ($1.8 billion) by selling new shares and use the money to pay down debt after the global slump slashed property values, Bloomberg reported.

Investors are being offered 276 million shares at A$10.50 apiece, 13 percent lower than yesterday's closing price, Sydney- based Westfield said today in a statement.

"The proceeds of the placement will further strengthen the group's balance sheet through the retirement of debt and position the group for potential acquisitions," the company said.

Westfield, which gets more than half of its sales from outside Australia, is battling slowing economic growth at home and recessions in the U.S., U.K. and New Zealand, its three overseas markets. The company said Jan. 27 it will write down assets by A$3 billion for the year ended Dec. 31, adding that profit may decline compared with last year.

Sales dropped 6.8 percent in the final quarter of 2008 at specialty stores in U.S. malls operated by Westfield, compared with the year-earlier period, the company said today. Occupancy at Westfield's U.S. malls fell to 92.6 percent at the end of 2008, from 94.1 percent as of December 2007, Westfield said.

The stock fell 37 percent in the past year and closed at A$12.10 yesterday.

Westfield expects earnings of 94 to 97 Australian cents per share in the year to Dec. 31, the Sydney-based company said today in a statement. Last week, the company forecast earnings of 97 cents to A$1 per share, compared with a preliminary A$1 per share for 2008.

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