Some of the UK’s biggest shopping centres are at the risk of shutting down as malls giant Intu struggles with funding

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Intu, one of UK’s largest shopping centre owners, has warned it may enter administration, which would hand ownership of the business to a third-party.
It has appointed KPMG to put together a contingency plan.
Intu is relying on standstill agreements ahead of a funding arrangement deadline with lenders on June 26.
Intu was struggling before the coronavirus pandemic. It had failed to fill some of its centres or secure necessary funding.
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Intu, one of UK’s biggest shopping centre owners, said on Tuesday that it may have to shut down some of its sites because of its financial woes.

It has appointed KPMG to make contingency plans for administration, which would see it lose legal ownership of its business. If a company is in debt and is unable to repay the money it owes, it can enter administration, where it can wind up without paying all its debts.

The struggling shopping mall operator was reportedly in debt before the start of the COVID-19 pandemic. It had struggled to secure funding and fill outlets at some of its sites.

It is currently discussing financial restructuring with lenders, but it could file for administration as early as Friday, June 26, if a standstill agreement does not materialize, according to Property Week.

Last month, Intu announced it would rely on standstill agreements until a revolving credit facility waiver deadline on June 26.

According to Intu’s latest update, discussion points with stakeholders include the duration of a standstill agreement, which is not expected to exceed 15 months, the extent to which creditors will share future valuation recovery, and how its individual shopping centres will be funded.

“Some centres have reduced rent collections as a result of COVID-19 and cash trapped under their financing arrangements which restrict their ability to pay for support (such as shopping centre staff) from other entities in the intu group,” Intu said in a statement.

In the event that it is unable to reach a standstill agreement, the mall operator said it is likely to fall into administration, and that some sites could close.

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Source:: Business Insider

      

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