Ramco-Gershenson Properties cuts 2009 outlook

Ramco-Gershenson Properties cuts full-year outlook, citing sale of shares, string of expenses

• On 5:46 pm EDT, Tuesday September 8, 2009

FARMINGTON HILLS, Mich. (AP) -- Real estate investment trust Ramco-Gershenson Properties Trust on Tuesday cut its full-year guidance, citing dilution from a stock offering, costs for a proxy contest and strategic review, and higher borrowing costs.

It also named director Stephen Blank as non-executive chairman. Dennis Gershenson will continue to serve as the CEO and president, the company said.

Ramco-Gershenson, which owns shopping centers and other retail properties, now expects full-year funds from operations ranging from $1.80 per share to $1.86 per share, down from its prior outlook of $2.21 to $2.34 per share. The revision includes a 15-cent per share cut due to an offering of 9 million common shares announced earlier Tuesday.

Ramco-Gershensen shares fell $1.23, or 12.8 percent, to $8.41 in aftermarket electronic trading, after closing the regular session up 2 cents at $9.64.

The company also said its board decided to keep the company as a stand-alone business after a review of its strategic and financial alternatives. And it said it received commitments for a new secured credit facility totaling $250 million, with Keybank National Association as its lead bank and eight participant banks.

The loan, which includes a $150 million revolving credit facility expiring Dec. 31, 2012 and a $100 million term loan expiring June 30, 2011, is expected to close by the end of the year. it will be backed by a number of Ramco-Gershenson properties.

It also received a commitment to amend its secured revolving credit facility for The Town Center at Aquia, a shopping center in Stafford, Va. The company will have $20 million credit available under this loan, reflecting a $20 million repayment under the existing facility, with quarterly reductions in availability in 2010. The Aquia facility will mature Dec. 31, 2010, with two 12-month extension options.

Ramco-Gershenson also said its board made several governance changes, including terminating its shareholder rights plan effective Tuesday. It said it will propose at the company's 2010 annual meeting to amend bylaws so that trustees will be elected annually for one-year terms. Currently, board members serve three-year terms, with one-third of the board up for election in any year.

The board's compensation committee also committed to establishing an annual incentive program for the CEO and chief financial officer based on specific performance measures in time for 2010. Previously, annual bonuses were up to the discretion of the committee.

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