Intu in crisis talks to avoid collapse, could sell some UK malls

By

Sandra Halliday

Published
Mar 27, 2020

Lakeside owner Intu is seeking emergency support from its lenders and the UK government after news that less than a third of quarterly rents it’s owed have been paid. 

The company, which also owns Manchester’s Trafford Centre as well as a raft of other shopping centres in the UK and Spain, had received 77% of rents owed this time last year, but has currently only had 29%. 

While that might not be an existential problem for some companies (such as British Land, which yesterday said it's in a strong cash position), for Intu, it’s a massive headache. The company has a huge debt load and last month failed to raise the £1.5 billion in extra cash it was seeking to help it with this.

There were strong concerns that the company was on the verge of collapse even before the coronavirus lockdown began. It owns some of the most popular shopping centres in the UK and has been one of the most forward-thinking landlords in terms of the application of technology and the opening of experiences at its centres. But £4.5 billion of debt is a near-impossible amount to manage in a depressed market and this has already led it to sell some of its attractive Spanish properties.

Intu, which employs around 2,600 people, said it’s asking its lenders to waive its debt commitments. “The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders,” it explained.

And as for government aid, it wants to access the £330 billion support package that the UK government has put in place for businesses. The government has already told tenants that they can withhold rent they owe for three months without fear of eviction, but it hasn't yet specified how it will support landlords in the situation. 

Industry publication Property Week also said that the firm is talking to shareholders such as John Whittaker’s Peel Holdings (which owns a 27% stake in the firm) about the possibility of it acquiring some assets. It’s been suggested that Trafford Centre, which Whittaker originally developed and sold to Intu’s predecessor company in 2011, could be bought back by him. 

Intu’s CEO is also reportedly attempting to get those investors who showed an interest in backing the aborted £1.5 billion fundraising in February to buy stakes in some of the firm’s wholly- and majority-owned shopping centres.