Shopping centre operator continues battle for survival
Shopping centre operator Intu Properties is seeking standstill agreements from its lenders as it battles for survival following a collapse in rent payments from retailers.
The company , whose malls remain closed with the exception of essential retailers until at least 1 June, has said it was likely to breach its debt commitments at the end of June as the stock market turmoil and downturn in the property market have made it impossible to raise new funds.
The shopping centre operator is now seeking a standstill agreement from its creditors by which it would not have to pay back borrowings until the end of 2021, with a pay-if-you-can interest agreement, to maintain stability until the property markets settle down.
The official statment reads: “intu believes that the best way forward is achieving stability through such a standstill until the market dislocation has stabilised and asset valuations and portfolio performance can be better understood by investors and debt providers and risk can be appropriately priced. When market dislocation has passed, there will be greater opportunity to explore alternative capital structures and solutions and disposals to ultimately fix the balance sheet.
“intu will seek to promote fairness and stability in its standstill proposals recognising there is risk of competing interests across groupwide stakeholder interests during this period of market dislocation.
“There can of course be no certainty as to whether any standstill can be achieved with all or some of the group’s creditors, or as to the terms. Whilst the standstill is the primary focus, it is possible that earlier individual breaches, under certain of the group’s financings, could occur over the coming weeks and the group will seek to address such instances as part of the wider discussions.”
The group says it will make further announcements as appropriate.
