Retail giant has debts of £5bn
Shopping centre giant Intu has warned that some of its retail sites could close as the firm buckles under the impact of covid-19.
The London-based chain, which made a loss of £2bn in 2019 and has debts of £5bn, has called in KPMG to “contingency plan for administration”.
If restructuring talks with lenders fail, it said it is likely that it will fall into administration.
It said: “In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres.”
It added that if the administrator is not pre-funded then its centres, which include the Trafford centre in Manchester and Lakeside in Essex, may have to close for a period.
Intu gave an update on its talks with lenders to achieve a “standstill” last month and since then the firm has held further talks with investors ahead of a 26 June credit deadline.
Intu is one of the biggest clients for commercial projects in the construction sector.
Vinci is currently working on a £75m revamp of the Trafford Centre, while McAlpine is working on £86m redevelopment of Nottingham’s Broadmarsh centre which has been stopped since the lockdown was imposed in March. Essex’s Lakeside shopping centre was extended (pictured) by McLaren in a £73m deal.
Intu was already struggling before covid-19 struck, having held talks in March with lenders in efforts to secure rescue funding.
The firm has furloughed around 60% of its shopping centre staff and 20% of head office employees.
Many of the retailers in its sites are struggling to pay their rent, with only 40% of its rental and service charge income being paid for the first quarter of 2020 according to its latest rent collection update.