The group, which also owns the Lakeside shopping centre, Essex, today confirmed that it has put KPMG on standby as administrator and negotiate the details with the lenders as it seeks to ensure vital breathing space in advance on Friday.
Intu is hoping to organize a so-called standstill agreement on terms of up to 18 months, but said, at this stage, it is unlikely to be more than 15 months.
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She was warned that if he cannot reach an agreement and it is placed in the administration, and then, without critical funding from its lenders, “there is a risk that the centres may close for a period of time”.
The owners of Intu Properties is to try to negotiate a freeze on loan repayments to its banks, but requires on the part of homeowners is more to this unlikely.
Earlier this month, Intu secured debt waivers until June 26, but said it expected to breach its debt commitments to this date in the middle of the fall of the lease payments.
The company said at the time that it would make agreements with the creditors waiting to cross the current crisis.
Intu was already under financial pressure as it came in the coronavirus pandemic, the sale of properties in the united KINGDOM and Spain in recent years to help sustain its finances.
In May, the company has threatened ” a decisive action against the main tenant firms that have not paid their rent for the coronavirus lock.
He said that he has received only 40% of the entire amount of rent and service charges for the first quarter of the year, which was expected by the end of the month of March.
The firm warned in March, he might collapse if she can not find more funds after it lost £2 billion in 2019.
Non-essential shops, in England, were only allowed to re-open eight days ago, from the 15th of June, after the lock, who had seen it all but essential shops, pubs and restaurants closed since mid-March.
In a statement, Intu, said on 18 May, he gave an update on the lender ” discussions , in particular, seek to achieve stability through status quo-the signing of agreements with the financial stakeholders through its structures, both at the asset and group level. ”
He stated that since this update, Intu has been in discussions with the main stakeholders to advance this stop strategy in advance of the revolving credit facility covenant waiver for the deadline of 26 June 2020.
Points under discussion are the following: the duration of the stop, with some stakeholders that want a duration of less than 18 months.
“At this stage, it is not intended that the duration may exceed 15 months,” he said. The scope and the base of which the creditors at the level of the asset will share (to the extent that it exists, after the repayment of the debt, accrued interest and applicable break costs) in the following the evaluation of the recovery; and the creditors of Intu Properties plc may also benefit (including, possibly, by the way of the future equitization of the PLC debt).
“How the operations of individual centres need to be funded. Some centres haver reduced the perception of the rents as a result of Covid-19 and species trapped under their funding agreements which limit their ability to pay for support (such as the commercial center of the staff) as well as other entities within the Intu group.
“Obtaining additional funds for centres funded by the bond issuance structures is more difficult to achieve and, in this regard, the consent will be sought shortly from the shareholders of Intu Debenture PLC for authorise the trustee to release certain funds within the debt structure to be used for the short-term liquidity needs.
“Other centers may also require injections of liquidity for these purposes. All of this remains the subject of further negotiations, with no certainty as to whether Intu will achieve the judgment, or to what conditions or for how long.
“More announcements will be made as the case may be. Despite the progress made with the lenders, Intu has also appointed KPMG, a contingency plan for the administration. In the case where Intu Properties plc is unable to reach a judgment, it is likely that he and certain other central entities will fall within the administration.
“In this situation, all property of the companies would be required to pre-fund to the administrator to provide central services to the shopping centres. If the administrator is not pre-funded, there is a risk that the centres may close for a period. ”
Intu Properties warned in March, the firm could collapse if it can not find more funds after it lost £2 billion in 2019.
Intu Properties – which owns nine of the country’s top 20 shopping centres – has struggled to cope with the decline of the High Street retail market for some time.
The group has not been able to reach an agreement with Hong Kong-based investor for a refinancing package in February.
Intu is loaded with debts estimated at around £5 billion.
The value of its shopping centre sites has decreased by £1.9 billion because of the economic downturn on the market.
The company has also made a £1.2 billion loss in 2018 as it was hit by the collapse of several big names of retailers, as well as others who grow through the insolvency of the plans of the company voluntary agreements (Cvas) to reduce the rents.