intu sells Derby stake to cut debt


intu sells Derby stake to cut debt

Published Date: 2019-07-10 | Source: Stephen Gunnion | Author: Stephen Gunnion

intu sells Derby stake to cut debt

In a structured equity transaction, Kuwait's Cale Street Investments will pay £186.3 million for half of the intu Derby shopping centre.

intu has finalised the sale of a 50% stake in its intu Derby shopping centre as it works to reduce debt. In a structured equity transaction, it's selling half of the centre to Cale Street Investments for £186.3 million. Cale Street is an investment firm backed by the Kuwait Investment Office, the London office of the Kuwait Investment Authority. The deal will give Cale Street priority when it comes to any distributions paid by intu in exchange for a cheaper source of funding.

The price tag excludes senior debt finance and customary working capital adjustments and was calculated using the centre's book value of £372.5 million in December. The centre delivered net rental income of £25.2 million last year.

Although the transaction will dilute earnings, intu said the part-disposal of the shopping centre was evidence of its strategy to reduce debt through disposals and part-disposals both in the UK and Spain. It said the deal also crystallised value significantly above the look-through value of intu Derby implied by the group's current share price.

intu will continue to manage the centre on behalf of the joint venture.

Its shares rose 1.1% to R14.05 yesterday.

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