(Alliance News) - Intu Properties PLC on Friday said it has secured covenant waivers for potential breaches under its revolving credit facility as it said it has received less than half the rent due for its second quarter.
The real estate investment trust said that it has agreed a covenant waiver for its revolving credit facilities until June 26.
It added that it has reached an agreement with a counterparty in respect of interest rate swaps entered into by a subsidiary which had a mandatory break at the end of April. The agreement allows the amounts due on the close out of the swaps to be left outstanding to be repaid on June 26 or later.
"We believe that these actions are another step forward that will allow us to extend our engagement to key stakeholders of the group at the asset level as we explore all options, including potentially seeking standstills to overcome the current market dislocations. This forms part of our ultimate strategic objective to fix the balance sheet over the medium-term," Intu said.
Intu has now received 40% of the rent due for its second quarter, it said. The company is now offering customers the ability to make monthly rent payments through to the end of 2020, adding that it is in advanced discussions with customers in relation to a further 28% of rents due.
The London-based company pointed out that there are a small number of large customers who have the ability to pay and have chosen not to. It noted that it is prepared to take legal action in order to collect payment.
As part of its cash conservation measures, Intu has furloughed 60% of staff in its centres and 20% of head office staff, also slashing board salaries by 20% for the next three months with the cuts expected to result in savings of around GBP3 million.
Separately, the company said it has received the final regulatory approval for the disposal of intu Puerto Venecia centre in Zaragoza, Spain and is working towards closing the EUR475 million transaction in the middle of May.
Intu Properties also said it has hired accountant David Hargrave as chief restricting officer and has appointed him to the board as a non-executive director.
Hargrave has 33 years of experience in transaction businesses of Big 4 accounting firms, Intu said. He was a partner at professional services firm EY from 2008 to 2019 and before that was partner at PricewaterhouseCoopers for seven years until 2007.
"I am delighted to welcome David to the board of intu. He brings a wealth of highly relevant experience from business turnarounds and restructuring. This will be of significant benefit as we work towards fixing the balance sheet and we look forward to his contribution to the board's deliberations," said Intu Chair John Strachan.
Intu shares were trading 6.5% higher at 5.91 pence each on Friday morning in London. Shares in Johannesburg were not trading due to the Workers Day holiday in South Africa.
By Ife Taiwo; ifetaiwo@alliancenews.com
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