// Intu puts administrators on stand-by
// The Trafford Centre owner drafts in KPMG to handle an insolvency process
Intu has reportedly put KPMG on standby to act as administrator, as it enters a new stage which will determine whether it survives through the Covid-19 crisis.
The shopping centre owner, which employs 2000 people, is lining up KPMG to handle an insolvency process if lenders refuse to grant a standstill, Sky News reported.
The development which has been agreed in the last few days as Intu’s board accelerates its contingency planning, highlights the state of the company.
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Intu chief executive Matthew Roberts has requested an 18-month standstill that would grant the company relief from covenant tests and payments on debt facility maturities.
Without lenders’ agreement, a waiver that expires on June 26 would likely result in the company’s administration.
Intu has about £4.5 billion of debt, but a market capitalisation at Friday’s closing share price of barely £126 million.
On the London Stock Exchange, Intu’s shares dropped almost 90 per cent during the last year.
The company employs nearly 3000 people directly – and a further 102,000 people working in its 17 UK shopping centres.
Another 30,000 people work in Intu’s broader supply chain.
This week, Intu published figures showing that a standstill agreement would leave it with enough cash to continue operating.
Meanwhile, the coronavirus pandemic has resulted in a number of major retailers refusing to pay their landlords.
Intu’s largest shareholder is John Whittaker, the Peel Group magnate who sold the Trafford Centre to what was then called Capital Shopping Centres in 2011.
Whittaker could emerge from a restructuring of Intu owning the Manchester shopping destination again.
Earlier this year, Intu tried to raise £1.5 billion from an emergency equity-raising, but all hopes collapsed when financial markets were impacted by the coronavirus crisis.
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