Johannesburg- and London-listed shopping centre owner Intu has collapsed after talks with creditors failed. The company was part of the FTSE 100 as recently as 2017, noted Yahoo Finance UK. Shares fell 53% on Friday before suspension in London, falling to just 1.8p. In Johannesburg, the stock price plunged about 75% to 29c/share. “Already in a sorry state before coronavirus, the pandemic and effective shuttering of its sites has tipped it over the edge,” Russ Mould, investment director of stockbroker AJ Bell, told Yahoo Finance UK in an email. A shift to online shopping, which has hit rental income and valuations of shopping malls, and Covid-19 strain on tenants have been blamed for Intu’s collapse. – Editor
Statement on London Stock Exchange news service:Â
Update on creditor discussions
On 23 June 2020, intu properties plc (“intu”) provided an update on discussions with key stakeholders to progress its standstill strategy ahead of the revolving credit facility covenant waiver expiry at 11:59 p.m. this evening, 26 June 2020.Â
Since that update, discussions have continued with the intu Group’s creditors in relation to the terms of standstill-based agreements. Unfortunately, insufficient alignment and agreement has been achieved on such terms.Â
The Board is therefore considering the position of intu with a view to protecting the interests of its stakeholders. This is likely to involve the appointment of administrators.Â
A further announcement will be made as soon as possible.
The person responsible for arranging the release of this announcement is Susan Marsden, Company Secretary of intu.
Appointment of administrator and share suspension
Application for appointment of administrators and application for suspension of listing and trading of Intu ordinary shares
Further to the announcement made earlier today, intu properties plc (“intu”) 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 (the “Administrators”) to intu and several other key central entities in the intu Group. The appointment is expected to become effective shortly.
In addition, following applications by intu:
- the Financial Conduct Authority has suspended the listing of intu’s ordinary shares on the premium segment of the Official List and the London Stock Exchange has suspended the trading of intu shares on the main market for listed securities maintained by the London Stock Exchange; and
- the Main Board of the Johannesburg Stock Exchange has suspended the listing and trading of intu’s ordinary shares on the Main Board of the Johannesburg Stock Exchange,
in each case with immediate effect.
Shopping centres continue to trade
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.
Background to the Administration
On 1 May 2020, intu announced a waiver to certain potential breaches in respect of its revolving credit facility until 11.59 p.m. on 26 June 2020, and that it was engaging with key stakeholders of the intu Group at both the asset and Group level to explore all options, including potentially seeking standstills to overcome the current market dislocation.
Discussions have been ongoing with financial stakeholders to achieving standstill-based agreements. However, insufficient alignment and agreement in relation to the terms of such standstill-based agreements has been achieved with financial stakeholders ahead of the above deadline. As such, application is being made for the Administrators to be appointed to intu and several other key central entities in the intu Group.
Bond and listed debt holders
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. The intu Group’s listed debt securities are as follows:
- ÂŁ350 million of Guaranteed Convertible Bonds due 2022 issued by Intu (Jersey) 2 Limited and guaranteed by intu, listed on The International Stock Exchange (ISIN XS1511910025);
- ÂŁ354,876,000 5.562% First Mortgage Debenture Stock 2027 issued by Intu Debenture plc, listed on the Official List and traded on the London Stock Exchange (ISIN GB00B1DBF788);
- Multiple series of commercial mortgage-backed notes issued by The Trafford Centre Finance Limited, listed on the Official List and traded on the London Stock Exchange;
- ÂŁ450 million 3.875 per cent Notes due 2028, ÂŁ350 million 4.625 per cent Notes due 2033 and ÂŁ350 million 4.25 per cent Notes due 2035, each issued by Intu (SGS) Finance plc, listed on the regulated market of the Irish Stock Exchange (ISINs XS0904228557, XS0904228987 and XS1131914811, respectively); and
- ÂŁ485 million 4.125% Fixed Rate Bonds due 2028 issued by intu Metrocentre Finance plc, listed on the regulated market of the Irish Stock Exchange (ISIN XS0994934965).
Further information for the intu Group’s bond and listed debt holders will be available shortly on intu’s website (www.intugroup.co.uk/en/investors/reports-results-and-policies/).
