Troubled shopping centre operator Intu Properties plc said on Friday it has gone into administration after failing to secure a debt repayment holiday from its creditors, but said its shopping malls will continue to trade.
Intu said the listing and trading of its shares in London and Johannesburg has been suspended.
Intu runs Manchester’s Trafford Centre and Arndale Centre, Newcastle’s Eldon Square, Gateshead’s Metrocentre and Glasgow’s Braehead.
According to Reuters data, Intu has net debt of £4.69 billion and had losses of over £2 billion in 2019.
“… Intu properties plc announces that application is being made for James Robert Tucker, Michael Robert Pink and David John Pike of KPMG LLP to be appointed as joint administrators to intu and several other key central entities in the intu group …” said Intu in a stock exchange statement.
“Underlying group operating companies remain unaffected and all shopping centres are continuing to trade.
“The intu group’s relationships with its tenants are with these operating companies, not the companies entering administration.
“The shopping centre operating companies have or are expected to enter into transitional services agreements with the administrators of the central entities to ensure continuity of service provision by the central entities to the individual shopping centres …
“The suspension of intu’s ordinary shares from listing and trading described above does not affect the listing and trading of the intu group’s listed debt securities and no application has been made for the suspension of listing or trading of such securities.”
Later on Friday, KPMG said: “Jim Tucker, David Pike and Mike Pink from KPMG’s Restructuring practice have been appointed joint administrators to intu properties plc (the listed “Topco” of the intu group), in addition to eight Topco subsidiaries.
“intu properties plc owns and operates 17 shopping centres across the UK including intu Trafford Centre, intu Lakeside, intu Merry Hill and intu MetroCentre, in addition to a shopping centre and development site in Spain.
“It directly employs circa 2,373 people, including 370 at its head office in London, and each year welcomes around 400 million visitors to its sites.
“Each of the shopping centres is owned individually by special purpose vehicles (Propcos) which are outside of any insolvency process and continue to trade as normal under the control of their directors.
“Importantly, an agreement has been reached with key stakeholders which will allow continued provision of central services to the Propcos.
“Consequently, all of the shopping centres will remain open and operational while the joint administrators assess options for the business and assets of the group.”
Tucker said: “intu owns many of the UK’s biggest and best-known shopping centres.
“The challenges affecting UK retail are well known and have been exacerbated by the impact of COVID-19 and the resulting lockdown.
“As today’s administration makes clear, those challenges have fed through to owners of retail property, even to owners of high-quality shopping centres such as intu’s.”
Pike said: “With all centres remaining open, we look forward to working with staff, suppliers and other key stakeholders to preserve value and jobs in these important retail destinations.”