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Intu hire restructuring boss to attempt fixing its balance sheet

1st May, 2020

01 May 2020

In attempt to fix its balance sheet, Intu, the struggling shopping centre has appointed David Hargrave as chief restructuring officer and non-executive director.

Hargrave is experienced in the transaction businesses of the Big 4 accounting firms. He has worked in leading processes of change or business restructure. He was a partner at EY and PwC.

Intu stated it received 40 per cent of its rent due for the first quarter of the year. Discussions are being held with tenants to collect the other 60 per cent; Advanced discussions being held with tenants to represent a further 28 per cent of the amount due. The property giant is in the process of confirming revised payment plans with its occupiers. Currently it is offering tenants monthly rents to the year end.

Despite this, ”robust action” is a threat for those ”large, well-capitalised” brands that have not paid rent.

27 March 2020

Update; Intu have only managed to collect 30% of their rents this quarter day compared to 77% this time last year.  Surely they cannot survive in their current form.

Intu, one of the largest shopping centre owners in the country, has warned that it is likely to go bust unless it can raise more finance.  This is not really that surprising as Intu, which owns Lakeside, Trafford Centre, and the Metro Centre was already in a difficult place due to falling rents in its shopping centres and the need to write down the value of its assets by £2bn . The company has a large debt of some £5bn that needs to be refinanced and recently announced losses of £2bn.  In January, the firm approached its shareholders to ask for more money amid the downturn in the retail sector.

Last week Intu said it was at risk of breaching debt covenants after it was forced to abandon the fundraising attempt. It said “extreme market conditions” deterred investors from giving fresh cash. To try and offset this they have been trying to sell their shopping centres. But really, who will buy them now?

Intu owns the following centres:

  • Braehead, Glasgow
  • Broadmarsh, Nottingham
  • Chapelfield, Norwich
  • Derby
  • Eldon Square, Newcastle
  • Lakeside, Essex
  • Merry Hill, West Midlands
  • Metrocentre, Gateshead
  • Milton Keynes
  • Potteries, Stoke-on-Trent
  • Trafford Centre, Manchester
  • Uxbridge
  • Victoria Centre, Nottingham
  • Watford

Centres run as joint ventures:

  • Manchester, Arndale
  • St David’s, Cardiff
  • The Mall, Cribbs Causeway

Intu has been particularly badly hit by the high profile failures of the Debenhams, House of Fraser, BHS and New Look to name a few.

The demise of the High Street, and now possibly the Shopping Mall, is a big worry for local councils and landlords that are losing out on rents and business rates.  The virus is likely to impact footfall across the whole country.  No doubt that there will be calls to tax the internet delivery giants as they are now disproportianally benefitting from the situation!

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