Shopping centre operator, Intu is seeking emergency support from its lenders and the UK government after receiving less than a third of it quarterly rents due to be paid.
The business, which owns sites such as the Trafford Centre in Manchester and Lakeside in Essex had received 77% of rents owed this time last year, yet currently only has 29% of these rents.
In response to this news, the shopping operator is seeking emergency support, as the company has been under immense pressure before the Covid-19 outbreak. Recently, Intu feared a potential collapse after the business announced its annual losses nearly doubled to £2 billion in 2019, due to a big decrease in the value of its shopping centres.
In addition, the business carries a huge debt load as it was forced to abandon plans to raise up to £1.5 billion to pay down its debt pile.
Intu said it’s asking help from its lenders to waive its debt commitments as “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.”
The business will also seek government support and funding as it hopes to benefit from the £330 billion support package the British government has put in place for businesses. Already, the government has advised tenants they can withhold rent due for three months without fear of eviction. However, the government is yet to disclose how it will support landlords amid the crisis.
In addition, Industry publication Property Week revealed that Intu is talking to shareholders including John Whittaker’s Peel Holdings (which owns a 27% stake in the firm) about the possibility of acquiring some assets. Suggestions have been made, that Trafford Centre, which Whittaker originally developed and sold to Intu’s predecessor company in 2011, could be acquired back by him.
Also, Intu’s CEO is reportedly trying to get previous investors who showed interest in backing the abandoned £1.5 billion fundraising in February to purchase stakes in some of the companies wholly and majority-owned shopping centres.