Shopping mall owner Intu Properties (INTU) gains 8% to 6p as it updates the market on its rather perilous situation for the first time since late March.
Already in a mess heading into the coronavirus crisis, the company faces the uncomfortable arithmetic of a market value of less than £100m and a debt pile that runs to £4.7bn.
At least it has reduced some of the pressure in the near term through covenant waivers until 26 June and other arrangements with creditors. The company says it is also looking at standstill agreements - i.e. getting lenders to agree they won’t take action to collect or enforce their debts for a set period of time.
Reports suggest though that creditors are looking to take control of some of its prime locations. The appointment of restructuring specialist David Hargrave as a chief restructuring officer and non-executive director reflects an aspiration to fix the balance sheet problem but that will be easier said than done in the current environment.
Lockdown of its sites isn’t complete - some remain partially open to facilitate access to essential retailers but the company has booked only 40% of rent due for the quarter.
Monthly rents are being offered to tenants through to the end of 2020 and the company is in discussion over another 28% of the amounts due.
The company bristles at the fact that some customers are not engaging including in its words ‘large well-capitalised brands’. Intu says it will take ‘robust action’ over legally-binding leases but ultimately this could be a costly and time-consuming exercise.
Staff have been furloughed, board have taken salary cuts, a further £3m of cost savings have been identified and the company is close to regulatory approval on the £405m sale of a Spanish asset but despite these actions Intu’s future remains very uncertain.
