Westfield owner Unibail-Rodamco Westfield (URW) has announced an €9bn (£8.1bn) ‘reset’ plan which will see it attempt to raise £3.2bn in capital and make a number of European disposals.
Along with capital raising URW said it will be limiting cash dividends through scrip and/or a lower payout ratio, resulting in around €1bn (££913m) cash savings over the next two years.
A further €0.8bn (£730m) reduction in development and non-essential operating capex and €4bn (£3.6bn) of disposals expected to be completed by year-end 2021.
The firm said its plan is designed to enable the group to preserve the strong investment grade credit rating, and maintain a sustainable capital structure with an LTV below 40% and
net debt / EBITDA below 9x.
Also in the update URW, revealed footfall in Continental European regions was now trending in the range of 80 – 90% of last year’s footfall. In the UK, It revealed footfall is in the 60 – 70% range and shows “good week-on-week development as people are returning to offices following the lockdown and summer holidays”.
Christophe Cuvillier, group CEO, said: “URW’s immediate priority, as announced on July 29, is to deleverage, primarily through asset disposals.
“However, given the uncertainties around the duration of the COVID-19 pandemic and the recovery, we have decided, as a matter of prudent management, to substantially strengthen our balance sheet, in order to maintain a robust investment grade credit rating and to ensure flexibility in a world that is unpredictable and requires agility.”
He added: “Our €9+ Bn “RESET” plan is designed to allow URW to fully embrace the changing retail environment through our Flagship destination strategy and capitalise on our unmatched portfolio quality’s mixed-use potential.
“On the operational front, we see continued improvement in footfall and tenant sales, and are making steady progress in our tenant negotiations. As the environment remains challenging, we believe today’s announcement, including the fully underwritten capital raise, is an important step to ensure URW is best positioned for the future.”