Updated from 10:52 a.m. EDT

Troubled mall developer

Mills Corp.


said Monday that it plans to sell its interest in three international properties for $981 million.

The real estate investment trust, which is restating its financial results and trying to sell itself, will unload its 50% interest each in Vaughan Mills in Ontario, Canada, and St. Enoch Centre in Glasgow, Scotland. Mills also will sell its wholly owned Madrid Xanadu project in Spain.

The buyer of the three sites is Ivanhoe Cambridge, the real estate subsidiary of Canada's largest institutional fund manager. Ivanhoe already owns the other 50% interest in Vaughan and St. Enoch.

Mills expects to receive net proceeds of about $500 million. The company plans to use the proceeds to pay down a portion of its senior term loan with Goldman Sachs Mortgage, which must approve the sale.

Mills shares tumbled 30% Friday to $15.91 after the company disclosed

new financial woes, including a series of asset writedowns and additional construction costs at its massive Meadowlands retail development in New Jersey.

Shares rebounded somewhat Monday, rising $1.69, or 11%, to $17.60.

In a research note, Bank of America analyst Ross Nussbaum, who cut Mills to a sell rating Friday, said the sales are a step in the right direction but that more work needs to be done.

"We believe that Mills will need to raise another $600-700 million of excess proceeds, either through additional asset sales (likely valued at $1.5 billion +) or an equity infusion to satisfy the repayment and 'adequate liquidity' requirements of the Goldman term loan," he wrote.

Meanwhile, a regulatory filing Friday showed that Seth Klarman, a noted value investor, reduced his Mills holdings in the second quarter, selling off 839,200 shares during the period ended June 30. His firm, the Baupost Group, now owns 1.77 million shares of Mills, representing a 3.1% stake in the company.