Intu appoints chief restructuring officer, secures covenant waivers

Troubled UK REIT intu has appointed David Hargrave to the new role of chief restructuring officer (CRO), as the company works through a strategy to fix its balance sheet.

Hargrave, who has been appointed as a non-executive director as of 1 May, joins from global accountancy firm EY, for whom he was most recently restructuring partner for its UK business.

In a release, intu said that Hargrave 'brings to intu deep professional experience of working with businesses of all sizes which are undergoing change or restructuring'.

A qualified chartered accountant, originating from Australia, Hargrave has 33 years of experience in the transactions businesses for Big-4 accounting firms.

Hargrave was a partner at EY from 2008 to 2019 and prior to that he worked for PwC from 1987 to 2007, the last 7 years as partner.

John Strachan, Intu's chairman, said: 'I am delighted to welcome David to the board of intu. He brings a wealth of highly relevant experience from business turnarounds and restructuring. This will be of significant benefit as we work towards fixing the balance sheet and we look forward to his contribution to the board's deliberations.'

Hargrave will not be independent upon appointment to Intu, meaning the REIT will not be compliant with the UK corporate governance code regarding the balance required on the board, excluding the chairman, of 50% independent directors and 50% non-independent directors. Intu said its board would keep this matter under close review.

1 May update
The firm also released an update on 1 May noting that it had secured waivers on covenants that were at risk of breach. 'The waivers are for the May tests and last until June, so it does not give them much flexibility but the battle for Intu has been an almost weekly one for a while now rather than anything longer term', said property analyst Goodbody.

Rent collection has improved to 40% from the 29% originally reported post-collection day, with Intu in advanced discussions to collect a further 28%. According to the firm, Intu remains ready to pursue a small number of well capitalised tenants who are refusing to pay rent, although Goodbody noted that they are shackled by current government bans on landlord remedies.

However, final regulatory approval for the sale of its Spanish asset Intu Puerto Venecia has been received and the firm expects the transaction to close in the next two weeks, bringing in £95 mln (€108 mln). 

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