Intu has confirmed that it is likely to enter administration if it cannot agree a standstill arrangement with lenders in the coming days.
With KPMG on standby to act as administrator, the REIT said discussions with various stakeholders continue ahead of a revolving credit facility covenant waiver deadline on Friday.
Points still to be agreed, according to the company’s stock market update, include the duration of a standstill, which intu said will not be longer than 15 months; the extent of any future value recovery for creditors at the asset and PLC levels; and how individual shopping centres will be funded, including freeing up money from existing debt arrangements for short-term liquidity.
On the latter point, intu said: “Some centres have reduced rent collections as a result of Covid-19 and cash trapped under their financing arrangements which restrict their ability to pay for support (such as shopping centre staff) from other entities in the intu group.”
The company added: “In the event that intu Properties is unable to reach a standstill, it is likely it and certain other central entities will fall into administration. In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres. If the administrator is not pre-funded then there is a risk that centres may have to close for a period.”
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