Intu bondholders draw up plans to seize assets

Some of Intu’s flagship malls could be seized by creditors as early as next month as bondholders have reportedly appointed advisors to draw up such plans if Intu breaches debt covenants.

According to a news report by React News, bondholders of £1.3 bn of debt secured against some of Intu’s centres have hired law firm Clifford Chance and investment bank Moelis & Company to draw up plans to take control of the assets. The properties include Lakeside in Essex, Braehead in Glasgow, Watford in Hertfordshire and the Victoria Centre in Nottingham.

Intu said in late March that it had received only 29% of rents that were due for the second quarter of 2020, as retailers hit by coronavirus measures withhold payment.

The UK retail REIT, which has seen its share price collapse to 4p from 106p a year ago, said this time last year it collected 77% on the March quarter day. In the UK, rents are normally collected quarterly in advance.

In a further blow, the struggling group also revealed that the impact of coronavirus is delaying the sale of intu Puerto Venecia, one of two Spanish shopping centres it put up for sale to raise urgently-needed cash.

‘The impact of Covid-19 in Europe is delaying certain regulatory approvals in relation to the disposal of intu Puerto Venecia and we now expect the £95 mln proceeds to be received in the middle of May at the earliest,’ a statement said.

Meanwhile, Intu has asked CBRE to look at a sale of two of its UK shopping centres, Merry Hill in Birmingham and intu Milton Keynes, as well as disposal of the REIT's 50% stake in the St David's Centre in Cardiff.

The company said it was in ‘constructive discussions’ with its banks to seek covenant waivers and disclosed that it is in ‘ongoing dialogue’ with the UK government to potentially access the £330 bn support package for UK businesses.

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