ASSOCIATED PRESS
The chief executive of the Mills Corp. assured anxious shareholders yesterday that there are no undisclosed financial problems looming as the troubled mall developer prepares to file its long-delayed financial earnings reports early next year.
Mark Ordan said the process of restating Mills reports has been “stunningly complex,” but he provided few details about the reports and the reasons the real estate investment trust pushed back its expected filing dates several times this year. He said there were no issues beyond the previously disclosed accounting errors, which the company is trying to fix.
“You should not read any of my remarks to say that there is some smoking gun out there that we are hiding,” Mr. Ordan said at Mills’ annual meeting in Bethesda.
Mills, which has not released an earnings report since the third quarter of last year, is restating its results between 2000 and 2004 and for the first three quarters of 2005. The company faces a Securities and Exchange Commission probe of its accounting practices.
Mills said yesterday it plans to file its 2005 annual report by the end of January, with 2006 quarterly results following soon afterward. The New York Stock Exchange gave Mills a two-month trading extension through March 1 as it prepares the 2005 report.
Shareholders voted yesterday to accept a slate of four nominees to the board put forth by Gazit and Mills, including Mr. Ordan.
Some shareholders complained that Mr. Ordan was too guarded, saying they could not get a strong picture of the company’s financial health without the reports.
“The shareholders are concerned there are more disasters out there that haven’t been disclosed,” said Steve Sherman, a private investor from Cleveland representing about 25,000 shares.
Mr. Ordan’s latest comments come as Mills looks for a buyer for all or part of the company, which owns 39 sprawling shopping malls across the nation, including Arundel Mills and Potomac Mills in the Washington area. Mills has changed its top leadership this year and shed some assets as it prepares itself for a possible sale. Mr. Ordan said there are “several bona fide bidders” for the company.
The Israeli real estate firm Gazit-Globe Ltd. has offered $25.50 per share for the Chevy Chase company. Gazit, which already owns 9 percent of Mills, has proposed a recapitalization plan worth about $1.2 billion.
Gazit was granted access to Mills financial statements after agreeing not to sell Mills shares based on the inside information.
A Gazit lawyer, Travis Laster, would not comment on the reports, citing a confidentiality agreement, but said Gazit is “still part of the process.”
The accounting firm Ernst & Young was reappointed as Mills’ accountant. But some investors questioned why the company was retaining the firm that worked for Mills when the accounting problems arose.
Mills spent the past year selling off some major assets, including three overseas malls. It also left a troubled $2 billion project to build Meadowlands Xanadu, an entertainment and retail mall in northern New Jersey. Longtime CEO Laurence Siegel retired in October.
Shares of Mills fell 21 cents to close at $20 on the NYSE. The company stock has traded in the 52-week range of $12.27 to $44.50.
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