// Hammerson may have to raise up to £500m to survive through Covid-19
// The shopping centre owner was hit after a major deal with Orion fell through
Analysts have reportedly said that Hammerson may tap investors for up to £500 million in an effort to weather the coronavirus crisis.
Hedge funds have predicted that the shopping centre giant, which owns Birmingham’s Bullring centre, will be forced to raise money in a rights issue after a major deal to offload retail parks collapsed, Mail on Sunday reported.
Short-sellers have swooped in expectation of a cash call that could be at a discount to the current share price, which closed on Thursday at just 53.5p.
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The company has debts of £2.4 billion, at just £410 million and any fundraise of hundreds of millions of pounds would mean a drastic restructuring.
Last week, private equity buyer Orion pulled out of a deal to acquire Hammerson’s seven retail parks for £400 million due to the pandemic.
Hammerson will get to keep the £21 million deposit paid by the bidder, but analysts have said it will need far more so that it does not default on bank loans.
Hammerson’s shopping centres and retail parks have been shut since the lockdown began in late March.
The company, which has scrapped its dividend to conserve cash, said at the end of March that it had only received around one third of the rent due by the end of the quarter.
Meanwhile, rival Intu, which owns the Trafford Centre in Manchester and Lakeside in Essex, failed in its own attempts to raise money.