Intu Properties has warned it could go under after reporting a £2bn loss in 2019.
The shopping centre owner said the spate of retailer failings had resulted in the value of its properties falling almost £2bn (or 22.3%) to £6.6bn.
Intu’s debt totals £4.5bn, giving it an unhealthily high loan-to-value ratio of 67.8%.
Chief executive Matthew Roberts highlighted a “material uncertainty in relation to Intu’s ability to continue as a going concern” in the companies full year results for 2019.
He added the group had options, including alternative capital structures and further disposals to provide liquidity. He said the group would seek to negotiate covenant waivers where appropriate, with the first material debt maturities in early 2021.
Intu was forced to abandon a £1.5bn emergency cash call last week having not secured enough investors interest, putting the future of the company in doubt.
In full year results, the group reported revenue had dropped from £581.1m to £542.3m, driven by a like-for-like drop in rental income of 9.1% due to retail administrations. Its EPRA net asset value (NAV) per share was chopped almost in half, falling to 147p from 293p at the end of 2018.
[Fixing the balance sheet remains the top priority for Intu but having failed in its bid to raise £1.5bn of emergency cash and with debt covenants piling up it is running out of options. Selling shopping centres is tricky enough at the moment, with a scarcity of buyers, and being a forced seller takes away any negotiating power Intu may have had. It really does need a white knight to swoop in and take it private. Whether someone would be willing to take that risk with rents and values continuing to fall is another question.]
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INTU : Intu warns it could go under after posting £2bn loss