Intu pleading for relief from creditors after plunging rent payments leave it facing cash crunch
Intu is pleading for relief from creditors after plunging rent payments have left it facing a cash crunch.
The commercial landlord, which owns Manchester’s Trafford Centre, says it will breach loan agreements next month unless its obligations are temporarily put on hold.
It is begging creditors to let it delay repayments until December 2021 at the latest, allowing to ride out the coronavirus crisis.
Hard times: Intu, which owns Manchester’s Trafford Centre, says it will breach loan agreements next month unless its obligations are temporarily put on hold
The plea for help comes after Intu received less than one third of the quarterly rent payments owed to it in March, with some retailers hit by the virus lockdown struggling to pay or temporarily withholding rent to bolster their own brittle finances.
It was a serious blow to Intu, which was already on the brink before the pandemic struck. The company faces a deadline of June 26 to meet conditions on its loans – after securing a short-term waiver from lenders – but it says it does not expect to manage that either and needs more time.
It is in talks with creditors about longer-term relief. Yesterday the company told investors there was still ‘significant uncertainty’ about how shops would be affected by the virus crisis even if they reopened from June 1, as the Government has suggested could happen.
Intu said this could further hit rent collections next month and leave it in need of substantial cash injections, at a time when it is harder to sell properties.
Intu’s shares have lost more than 95 per cent of their value in the past year. Landlords including Intu, Hammerson and British Land have all been hammered by the virus crisis, which shut thousands of tenants’ stores and forced some into administration.
Analysts yesterday expressed doubts about Intu’s future, saying it may need taxpayer-funded support.