intu administration for shopping centre owner


intu administration for shopping centre owner

Published Date: 2020-06-29 | Source: Stephen Gunnion | Author: Stephen Gunnion

intu administration for shopping centre owner

Its shares plunged between the time it warned that administration was likely and their suspension hours later.

intu Properties' shares plunged on Friday after it warned that it was likely to go into administration after debt restructuring talks with its creditors failed to come up with a solution. Between the time of its warning, before the market opened, and the suspension of its shares in Johannesburg and London in the afternoon, its stock had fallen 72%. It has appointed three administrators at KPMG to take charge.

The accountancy firm was put on standby earlier in the week as intu scrambled to get a debt standstill deal in place with its creditors by noon on Friday, when a waiver for its revolving credit facility expired. An agreement would also have bought it time to find a solution to fix its balance sheet over the medium term. It has debt of more than £4.5 billion.

The group owns 17 UK shopping centres including the Trafford Centre in Manchester and Lakeside outside London. It also owns centres in Spain but has been selling some of those to reduce its debt burden. The group was already in a tight situation before Covid-19 as property values declined due to the impact of Brexit on consumer and investor sentiment. The situation was exacerbated by the pandemic. Apart from essential stores, most of the shops at its centres remained closed until 1 June when lockdown restrictions were eased in England.

The mall owner said its operating companies remained unaffected and all its malls continued to trade. The shopping centre operating companies were expected to enter into transitional service agreements with the administrators, it said. On Tuesday, it said that if in entered administration funds would have to be made available to KPMG to provide central services to its shopping centres. Failing that, there was a risk that centres would have to close for a period.

intu's shares were suspended at 29c, taking losses for the year to 95%.

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