Milton Keynes shopping centre owner Intu in fight for survival

    Intu Properties reveals "material uncertainties" over its ability to continue as a going concern, sending shares plummeting.

    Sky News is reporting that the owner of nine of the UK's largest shopping centres has warned its future is hanging in the balance because of a worsening cash crunch.

    Intu Properties, which counts Manchester's Trafford Centre and Lakeside in Essex among its portfolio of sites, abandoned a £1.5bn fundraising to pay off debts a week ago.

    It cited "extreme" market turmoil over coronavirus.

    While announcing a deepening of annual losses to more than £2bn, the company said there was now "material uncertainty" over its ability to continue as a going concern.

    Intu revealed talks with its lenders to give it some breathing space and said it was examining avenues to boost its finances.

    Chief executive Matthew Roberts said: "In the short term, fixing the balance sheet is our top priority.

    "We have options including alternative capital structures and further disposals to provide liquidity, and will seek to negotiate covenant waivers where appropriate."

    Sales plunged as the clock ticked down to the various Brexit deadlines - with even Sir Philip Green's Topshop empire not immune from the crisis in confidence.

    That combined with surging costs from things such as business rates and minimum wage rules to hit store-based retail models.

    Intu said half of the 9.1% fall in its like-for-like rental income last year was a direct consequence of rescue deals for chains and administrations.

    It has a debt pile of £4.5bn - with the potential impact of the coronavirus crisis threatening to pile more pressure on its shopping centre occupants.

    The company said it was yet to see much of a deterioration though it was "monitoring" events closely.

    Its shares were more than 12% lower in late morning trade.

    Julie Palmer, partner at consultancy Begbies Traynor, said of the update: "The rippling effect of the high-street malaise has rocked Intu Properties with the shopping centre owner struggling with a mountain of debt and difficulty raising fresh investment from its shareholders to help ride the storm.

    "As more high-street brands fail under the ruthless market conditions, Intu has been one of the first victims to suffer with a high number of store closures at its locations."

    She added: "The failure to proceed with an equity raise means the company's future and the next few months will prove decisive.

    "Chief executive Matthew Roberts will be feeling the heat and if he cannot provide an alternative strategy then the outlook could be bleak."

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