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Shopping centre owner Intu warns it could go into administration
23rd Jun 2020 07:57
(Sharecast News) - Intu Properties warned on Tuesday that it could go into administration and its shopping centres could be forced to close if it can't agree a standstill with its lenders.
The company, which owns Lakeside shopping centre and the Trafford centre, among others, has appointed KPMG to "contingency plan" for administration.
Intu is currently in talks with creditors about a standstill on loan repayments. It said that some of its stakeholders want a duration of less than 18 months, but it is not expected that the duration will exceed 15 months.
As well as duration, talks are focused on the extent and basis to which creditors at the individual asset level will share in any future valuation recovery.
The company's revolving credit facility covenant waiver with lenders expires on 26 June.
"In the event that Intu Properties is unable to reach a standstill, it is likely it and certain other central entities will fall into administration," it said. "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 Lakeside shopping centre and the Trafford centre, among others, has appointed KPMG to "contingency plan" for administration.
Intu is currently in talks with creditors about a standstill on loan repayments. It said that some of its stakeholders want a duration of less than 18 months, but it is not expected that the duration will exceed 15 months.
As well as duration, talks are focused on the extent and basis to which creditors at the individual asset level will share in any future valuation recovery.
The company's revolving credit facility covenant waiver with lenders expires on 26 June.
"In the event that Intu Properties is unable to reach a standstill, it is likely it and certain other central entities will fall into administration," it said. "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."