23 June 2020 18:34
Make informed decisions with the FT Keep abreast of significant corporate, financial and political developments around the world. Stay informed and spot emerging risks and opportunities with independent global reporting, expert commentary and analysis you can trust. Sign up to FREE email alerts from NottinghamshireLive - Daily Subscribe Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email The owner of Nottingham's Victoria Centre and Broadmarsh has warned its shopping centres may have to close if administrators have to be called in following crunch talks with lenders. Shopping centre giant Intu, which runs 17 shopping centres across the country, has administrators on standby under its latest contingency plans, as company bosses engage in critical talks over its £4.5bn debt. These talks will determine what happens after the coronavirus pandemic and come after bank lenders agreed a loan waiver on its debts.
However, the agreement expires on Friday, June 26. A spokesman for intu said the firm was working with KPMG as part its contingency planning - but made clear the business remained focused on securing the agreement with its lenders before the end of this month. In a statement the company said that if it cannot reach an agreement and is placed in administration, then without critical up-front funding from its lenders, "there is a risk that centres may have to close for a period". Intu said: "Notwithstanding the progress made with lenders, Intu has also appointed KPMG to contingency plan for administration. "In the event that Intu Properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration.
Despite the construction industry getting the go-ahead to return to sites in May, intu failed to instruct contractor Sir Robert McAlpine to return to work. And on Tuesday, June 16, scaffolding was taken down at the shopping centre after redevelopment work was put on hold. Contractor Sir Robert McAlpine confirmed to Nottinghamshire Live the removal of equipment and "demobilisation" of the site at intu Broadmarsh in the wake of its closure. Intu's centres are: Some shopping centres around the UK may have to close down after landlord Intu warned it may fall into administration if it cannot reach a deal with its lenders. Intu, which has 17 shopping centres across the UK and a huge £4.5billion debt mountain, is asking lenders to freeze interest and debt repayments ahead of a crucial deadline on Friday.
The owner of Manchester's Trafford Centre and Lakeside in Essex today confirmed that KPMG administrators have been put on standby in case it cannot reach a so-called standstill agreement with banks. Shopping centres like Manchester's Trafford Centre (pictured) and Lakeside in Essex may close down if their owner Intu does not reach a deal with its lenders 'In the event that intu properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration,' Intu said in a statement today. In this situation, the various companies within the group would have to put money into the administration. 'If the administrator is not pre-funded then there is a risk that centres may have to close for a period,' it added. Intu is asking for a standstill on loan repayments for up to 18 months, but said at this stage it is unlikely to be more than 15 months. It comes as the company, which was already struggling before coronavirus struck, has been hit further by the lockdown, as many of its tenants have demanded reduced rents or refused to pay rent altogether at their shuttered sites. First quarter rent was due in March but only 40 per cent has been paid. The next quarterly payment is due tomorrow. Intu shares have fallen 3.5 per cent to 4.45p. Lakeside owner Intu Properties has warned that its shopping malls across the UK may have to close if it calls in administrators as it remains locked in crunch talks with lenders. The group, which also owns Trafford Centre, confirmed it has put KPMG on stand-by and is negotiating details with lenders as it looks to secure vital breathing space ahead of a deadline on Friday. Intu is hoping to arrange a so-called standstill agreement on terms of up to 18 months, but said that at this stage it is unlikely to be more than 15 months. It warned that if it cannot reach an agreement and is placed in administration, without critical upfront funding from its lenders "there is a risk that centres may have to close for a period". It emerged earlier this month that KPMG had been appointed to make contingency plans for Intu's administration. Intu is thrashing out details of a possible agreement with lenders before June 26, when covenant tests are due on its lending deals. Given the impact of the coronavirus crisis on shopping centres, which were forced to close for nearly three months amid the lockdown, the business is likely to fail these covenant tests. It is also due for updated valuations of its shopping centres this month, which could see it breach lending agreements, given woes in the sector. Intu said talks are focusing on the length of a possible standstill, how much creditors could share in any future upside in shopping centre valuations, as well as changes to how shopping centres are funded to allow them to pay for staff, such as security and health and safety. It said: "Some centres have reduced rent collections as a result of Covid-19 and cash trapped under their financing arrangements which restrict their ability to pay for support, such as shopping centre staff, from other entities in the Intu group." If this cannot be secured, then malls may be forced to shut, it warned. Intu said: "In the event that Intu Properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration. "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."