INTU, the company that owns the Lakeside Shopping Centre in Thurrock, has warned it will be forced into administration if talks with lenders to agree a standstill agreement fail to progress reports Bloomberg.Com.
The company’s current agreement with the seven banks that provide its 600 million pounds revolving credit facility is due to expire on June 26 and the lenders have yet to agree an extension, the company said in a statement on Tuesday.
“In the event that Intu Properties Plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration,” the statement said.
Intu, which owns nine of the U.K.’s top 20 shopping centres, was already grappling with plunging rents and values for brick and mortar stores before the coronavirus hit. Now with retailers unable or unwilling to pay rent in the midst of the crisis, the company is on the brink.
The company has about 4.5 billion pounds of debt, most of which is secured against individual properties or groups of centres. It is seeking to negotiate breathing space with lenders that would involve them waiving certain breaches of loan terms as it attempts to ride out the storm and sell assets or raise capital to pay down debt. Lenders are unlikely to agree to a grace period of any more than 15 months, the company said.
Lenders ability to share a potential increase of the value of the centres is another key discussion point, Intu said. The company also wants additional funding to help keep the shopping centres running while rent collection is low and some rent is being held by lenders as security.
Intu confirmed it has appointed KPMG to its contingency plan for administration.
Intu’s bonds guaranteed on the Metrocentre mall, due 2023, are indicated at 50 pence on the pound, according to data compiled by Bloomberg.