Intu warns shopping centres could close “for a period” if rescue talks fail

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Shopping centre owner Intu Properties has warned its centres across the UK may close if it is forced to call in administrators as it remains locked in crunch talks with lenders.

The group, which owns the Trafford Centre in Manchester and the Gateshead Metrocentre, confirmed it has put KPMG on standby as administrator and is negotiating details with lenders as it looks to secure vital breathing space ahead of a deadline on Friday.

Intu is hoping to arrange a so-called standstill agreement on terms of up to 18 months, but said at this stage it is unlikely to be more than 15 months.

It cautioned that if it cannot reach an agreement and is placed in administration, then without critical up-front funding from its lenders, “there is a risk that centres may have to close for a period”.

Intu said: “Notwithstanding the progress made with lenders, Intu has also appointed KPMG to contingency plan for administration.

“In the event that Intu Properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration.

“In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres.

“If the administrator is not pre-funded then there is a risk that centres may have to close for a period.”

The company, which owns a number of shopping centres around the UK and Spain, was suffering from huge debts even before the coronavirus outbreak.

Since the lockdown, the company’s rental income has plunged and last month it announced it was talking to its banks on a “standstill” agreement that would see it get relief on its debts for the next 18 months.

The centres re-opened to shoppers last week with new measures in place to ensure social distancing.


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