Intu Properties, owners of Victoria Centre and part-owner of Broadmarsh in Nottingham, has pulled out of an emergency fundraising effort after saying market conditions had left it unable to raise its minimum target of £1.3bn from investors.
The news sent Intu shares down 43% at the start of trading, but the price later improved to -20%.
intu has held discussions with shareholders and new investors over the last few months to try to raise the target to improve the balance sheet.
This failure to get the funding in place means Intu, which has £4.5bn of debt, missed deadlines set by banks to grant a new four-year £440m credit facility. The company said that this means there is a risk it could breach some bank covenants when they are next tested in July 2020.
Matthew Roberts, Chief Executive of intu commented:
“We remain focused on fixing our balance sheet in the near term to ensure this business has the financial footing it needs to realise its significant potential. While it is disappointing that the extreme market conditions have prevented us from moving forward with our planned equity raise, I am pleased that a number of alternative options have presented themselves during the process which we will now explore further.
“We have a concentrated and well-invested portfolio of many of the UK’s best retail and leisure destinations where both shoppers and customers want to be. Operationally our business is strong, delivering a resilient rental performance despite ongoing pressure from CVAs and administrations, with stable occupancy rates and footfall that consistently outperforms the benchmark. Our centres are the best performers in the regions in which we are present and independent research shows that stores with intu outperform retailers’ average sales by nearly 30 per cent. This is a compelling proposition and one that will stand the test of time.
“We will face further challenges in what has been an extraordinary few months for intu and the wider sector, but I am confident that we will face these head on and emerge a leaner, fitter and more focused business”
