(Alliance News) - Intu Properties PLC has put administrators on standby as the shopping centre owner struggles to survive the coronavirus pandemic, Sky News reported Saturday.
The shopping centre owner will turn to accountant KPMG if lenders refuse to grant a standstill on its vast debt obligations, according to Sky.
Intu has requested an 18-month standstill that would grant it relief from covenant tests and payments on debt facility maturities.
Sky reported, without lenders' agreement, a waiver that expires on June 26 would almost certainly trigger the company's collapse into administration. Citing a banking source, Sky said Intu could be declared insolvent within a fortnight if it fails to make sufficient progress in the negotiations with lenders.
https://news.sky.com/story/coronavirus-shopping-centre-giant-intu-puts-administrator-on-standby-12001614
Shares in Intu were down 25% in early trading in London on Monday at 6.90 pence each - after starting 2020 trading at 32.68p. In Johannesburg, shares were down 11% at ZAR1.82 each.
In mid-May, Intu said it would need standstill arrangements in place to prevent breaching banking covenants or financial liquidity requirements.
These standstill-based agreements would seek relief for Intu from covenant testing, debt amortisation, and maturity payments until no later than the end of 2021.
The firm announced at the start of May that it has obtained a waiver for some breaches of its revolving credit facility through to June 26 and was talking with "key stakeholders", while assessing its options including a possible standstill.
In early March, Intu was unable to launch a fundraise amid uncertainty "equity markets and retail property investment markets", heaping even more pressure on the firm.
The retail property owner said it had been in talks with new and existing investors for "several months" about the possibility of an equity raise between GBP1 billion and GBP1.5 billion.
In February, the company reported that Link Real Estate Investment Trust, an Asian investor, decided against taking part in an equity raise. The Hong Kong-listed firm was part of the negotiations to raise cash but informed the firm that it no longer intended to "participate in a recapitalisation of the company", intu explained.
By Paul McGowan; paulmcgowan@alliancenews.com
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