Shopping centre operator Intu Properties has announced a short-term solution to its debt problems, though it still needs to raise more than £1bn to secure its future.
The firm – the owner of some of the 海角视频’s biggest shopping and leisure complexes - has agreed a £440m revolving credit facility (RCF) that will run until 2024 after securing the agreement of its seven banks.
The facility replaces a £600m credit package due to come to an end next month, which was in place with the same banks: Bank of America, Barclays, Credit Suisse, HSBC, Lloyds, Natwest and UBS.
But the new agreement is contingent on Intu raising at least £1.3bn of equity as it tries to pay down debt, which were originally thought to be around £5bn.
Intu directors have previously warned that its debt levels are too high and have sold off two Spanish holdings in recent months to help improve its balance sheet.
But discussions with Hong Kong investment group Link Real Estate Investment Trust broke down within a day of them being made public, leading to Intu’s shares tumbling in value.
Intu said it was working with brokers BofA Securities and UBS and financial adviser Rothschild & Co on the equity raise, and will say more when it releases its annual results next Thursday.
Matthew Roberts, chief executive of intu, said: “This extension of our RCF is a key milestone in addressing our near-term refinancing needs. It also underlines the continued support we have from our relationship banks. This revised RCF will extend the maturity profile and be used to provide general liquidity for intu.
Most Read
“Fixing the balance sheet remains our number one priority and we remain engaged with shareholders and potential new investors in relation to the intended equity raise.”
Intu - owner of the Trafford Centre in Manchester, Gateshead's Metrocentre The Mall at Cribbs Causeway in Bristol and the Merry Hill centre in Dudley - has suffered in the last year following the demise of several big-name retailers, while other firms have pushed through insolvency plans known as company voluntary arrangements (CVAs) to bring down rents.
Two takeover attempts of Intu have foundered while successful retailers, including Hotel Chocolat and Next, have demanded their own rent reductions, arguing they should not be penalised with higher bills for being successful.
Intu is not alone in suffering from the problems in the retail sector, however.
This week Birmingham Bullring owner Hammerson - one of the firms to call off a takeover attempt of Intu - slumped to a £573.8m pre-tax loss in the year to December 31, widening from a £173.3m loss in 2018, as it received lower rental income.