Britain’s largest shopping centers, including Lakeside and the Trafford Center, may close as owner Intu admits it is “likely” to call administrators.
Intu Properties said talks with the lenders had not reached an agreement and warned it was about to call administrators.
The company, which owns 17 malls, warned on Tuesday that the malls could be forced to close if they were unable to secure the standstill agreement.
The Trafford Center in Manchester is one of 17 shopping malls owned by the heavily indebted company Intu
Lakeside in Essex is another shopping center owned by Intu, which has until midnight Friday to reach an agreement with the lenders
In a statement, the group, which has until midnight Friday to reach an agreement, said: “insufficient alignment and agreement have been reached”, adding: “The board of directors is therefore examining Intu’s position to protect the interests of its stakeholders.
“It will likely involve the appointment of directors. A new announcement will be made as soon as possible. “
A source told Sky News that she was “90% certain” that Intu would join the administration.
Earlier this week, Intu chief operating officer Gavin Prior said traffic had increased by more than 300% after stores reopened in its malls, including the Trafford Center.
The anonymous source, who is said to be close to the negotiations, added: “There is a glimmer of hope, but only a glimmer.”
The group, which also owns Lakeside in Essex, confirmed earlier this week that it has put KPMG on standby to act as directors.
He hopes to conclude a so-called standstill agreement with the lenders and has warned that if he does not reach an agreement “there is a risk that the centers will be forced to close for a period”.
Intu Metrocentre in Gateshead is at risk, as are 16 other shopping centers belonging to the group
The collapse of the heavily indebted group, which has suffered a drop in income due to the blockage, would put thousands of jobs at risk.
The 17 Intu shopping centers in the UK are:
Intu Braehead (Glasgow)
Intu Broadmarsh (Nottingham)
Intu Chapelfield (Norwich)
Intu Eldon Square (Newcastle)
Intu Lakeside (Essex)
Intu Merry Hill (Brierley, near Dudley)
Intu MetroCentre (Gateshead)
Intu Milton Keynes
Intu Potteries (Stoke-on-Trent)
Intu Trafford Center (Manchester)
Intu Victoria Center (Nottingham)
The group has faced a debt burden of £ 4.5 billion over the past year, but has been hammered by considerably lower rent payments from retail tenants since the coronavirus outbreak.
In May, Intu warned that it was facing “significant market uncertainty” as a result of the Covid-19 pandemic and the ensuing foreclosure.
Only essential stores were able to remain open in its 17 centers across the country, until the lockout measures were relaxed earlier this month.
Intu employs around 3,000 people across the UK, while another 102,000 work for the stores in its shopping centers.
After months of locked stores and empty aisles, the loosening of lockdowns saw a 51% increase in shoppers heading to the main street, new data shows.
Between Monday June 15 and Sunday June 21, the number of buyers increased from the previous week but remains at historically low levels, according to Springboard.
In all UK retail destinations, attendance increased by 45% despite the fact that Wales and Scotland kept non-essential stores closed.
Attendance increased by more than 300% in Intu shopping centers following the reopening of non-essential retailers.
Gavin Prior, director of operations at Intu, owner of the Trafford Center, said: “Attendance has increased over the weekend and Saturday and Sunday have been our busiest days so far.
“The number of visitors increased by 321% last weekend in all Intu centers, with more than half of the stores in our centers now open.”