Intu, the owner of popular UK shopping centers, is currently facing a crisis as it tries to avoid collapse amidst the COVID-19 pandemic. The company, which owns well-known centers such as Lakeside and Manchester’s Trafford Centre, is struggling to collect rent payments, with less than a third of the quarterly rents being paid. This is a significant decline compared to the previous year when Intu received 77% of the owed rents.
The situation is particularly concerning for Intu, as it already carries a heavy debt load and failed to raise the £1.5 billion it needed in additional cash. Even before the lockdown began, the company was facing challenges in managing its £4.5 billion debt in a depressed market. In an effort to alleviate some of the financial pressure, Intu has already sold some of its attractive Spanish properties.
To address its financial difficulties, Intu is seeking emergency support from its lenders and the UK government. The company is asking its lenders to waive its debt commitments and engage in constructive discussions with them. Intu is also looking to access the £330 billion support package established by the UK government to aid struggling businesses. However, while the government has allowed tenants to withhold rent for three months without eviction, it has not yet announced its plans to support landlords in this situation.
In addition to seeking support from lenders and the government, Intu is in talks with shareholders, including John Whittaker’s Peel Holdings, which owns a 27% stake in the company. There is a possibility that Whittaker may acquire some assets, such as the Trafford Centre, which he previously developed and sold to Intu’s predecessor company in 2011. Furthermore, Intu’s CEO is actively trying to secure investors who showed interest in the aborted £1.5 billion fundraising in February to purchase stakes in some of the company’s shopping centers.
Despite the challenges it faces, Intu remains hopeful that it can find a solution to avoid collapse and safeguard its assets. Ongoing discussions with lenders, the government, and shareholders provide a glimmer of hope for the company’s survival. However, the future remains uncertain for Intu as it navigates through a challenging market further impacted by the COVID-19 pandemic.