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Shopping centre giant Intu collapses into administration
26 June 2020, 16:03
Britain's biggest shopping centre owner Intu has collapsed into administration following talks with lenders.
The group has insisted that its sites, including the Trafford Centre in Manchester, Lakeside in Essex and the Metrocentre in Gateshead, will continue to trade despite the insolvency.
Crunch talks with lenders ahead of Friday's midnight deadline failed to achieve "sufficient alignment and agreement" between the parties, the group said.
Intu employs roughly 3,000 staff across the UK while more than 100,000 people work in the shops within the centres, which include big high street names such as Marks & Spencer, Next and H&M.
The company announced it has applied to appoint administrators from KPMG, after warning earlier on Friday that it was on the brink of going under.
Confirmation came just minutes after the London Stock Exchange suspended shares in the listed firm.
Intu had been desperately scrambling to agree a "standstill" on its current loan agreements but on Friday it said it was likely administrators would be brought in following disagreements on the terms of such a deal with creditors.
Earlier this week, Intu said it put the administrators from KPMG on stand-by as it looked to secure a deal ahead of the midnight deadline on its current loan covenants.
The group has struggled under a £4.5 billion debt burden for the past year, but has been hammered by significantly lower rent payments from retail tenants since the coronavirus outbreak.
However, it warned on Tuesday that its shopping centres may be forced to close if it was unable to secure the standstill agreement.
The company has made a court application to appoint administrators to Intu and several other key parts of the Intu Group and the official appointment will become effective shortly.
It had been under pressure prior to the coronavirus pandemic due to the falling value of its centres, as well as those of rival groups such as Hammerson and British Land.
Significant occupiers, such as Debenhams, House of Fraser and Topshop, closed stores before the outbreak and demanded rent cuts so that they could stay in business.
Following lockdown, Intu received only 29 per cent of the revenue it was due on rent day.