Intu revealed it has abandoned plans to raise between £1bn and £1.5bn in emergency cash, citing “current uncertainty” in the equity markets.
The retail property group had previously announced it was reviewing a “range” of options to fix its balance sheet and establish a “more appropriate” long-term capital structure.
In January, it was then revealed the group was engaging in “constructive discussions” with shareholders and potential new investors on the proposed equity raise.
Following these discussions, Intu has now concluded it is “unable to proceed” with an equity raise.
The board said that while a “number” of shareholders indicated their support for an equity raise, “current uncertainty” in both equity markets and retail property investment markets deterred potential investors from committing capital into the group.
However, Intu did reveal it received “several expressions of interest” to explore alternative capital structures and asset disposals.
The group, which owns Lakeside in Essex and the Trafford Centre in Manchester, said it will now continue to “broaden its conversations” with stakeholders to discuss options that “demonstrate the equity value of the business” and “utilise its assets to provide further liquidity”.
These include alternative capital structures and solutions and further disposals, and the group said it will also continue to “keep under review the feasibility of an equity raise”.
In a brief trading update, the group also revealed that full year like-for-like rental income for 2019 was down by 9.1%, and that guidance for 2020 remains unchanged, with a “further decline but at a slower rate” than 2019.
Its audited preliminary results will be announced on 12 March 2020.
Matthew Roberts, chief executive of Intu, said: “We remain focused on fixing our balance sheet in the near term to ensure this business has the financial footing it needs to realise its significant potential.
“While it is disappointing that the extreme market conditions have prevented us from moving forward with our planned equity raise, I am pleased that a number of alternative options have presented themselves during the process which we will now explore further.”
He added: “Operationally our business is strong, delivering a resilient rental performance despite ongoing pressure from CVAs and administrations, with stable occupancy rates and footfall that consistently outperforms the benchmark.
“We will face further challenges in what has been an extraordinary few months for Intu and the wider sector, but I am confident that we will face these head on and emerge a leaner, fitter and more focused business”
