Intu confirms plan to raise more funds to cut debt

today Jan 20, 2020
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Under-pressure shopping centres giant Intu confirmed on Monday that it’s taking action to deal with its large debt load of close to £5 billion and said it “continues to make progress in its strategy to fix the balance sheet”.

Intu Derby

And it’s planning an equity raise alongside its full-year results at the end of February. It said it’s “currently engaged in constructive discussions with both shareholders and potential new investors on the proposed equity raise”.

There had been a number of press reports suggesting it was looking to raise further cash and it seems the statement was rushed out in response to newspaper stories.

Debt has been an increasing issue for Intu and only last month it exchanged contracts to dispose of one of the Spanish centres it part owns, Intu Puerto Venecia, for €475 million. Its share of that sale was €238 million and the net proceeds will be used to repay debt, although this is only expected to reduce its loan-to-value figure by around 1%. It actually made nearly £500 million of disposals in 2019, and the negotiations for the disposal of Intu Asturias are also at an “advanced stage”.

CEO Matthew Roberts said the company “delivered a robust operational performance for 2019, finishing with a busy Christmas trading period”. Total footfall in 2019 was 0.3% ahead of 2018, and while it was flat in the UK, that “significantly outperformed the Springboard footfall monitor for shopping centres”.

Roberts added that occupancy was “stable at 95% and to date, 97% of rent has been collected for the first quarter of 2020, demonstrating the lower risk of our existing customer base”.

He said the company is making “good progress” with fixing the balance sheet, which is “our number one priority,” and is confident that it has “the right strategy in place to enable us to prosper as we see continued polarisation between the best destinations and the rest”.

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