CoronavirusShopping Centres

Intu places KPMG on standby as administration threatens

Shopping centre owner Intu has reportedly placed KPMG on standby in case it falls into administration ahead of an important period for the business.

According to Sky News, Intu will appoint KPMG to handle an insolvency process if lenders refuse to freeze its debt obligations.

Intu has reportedly requested a period of 18-months grace from payments on debt facility maturities and covenant tests.

The move comes as part of a contingency plan ahead of its current waiver expiring on the 26 June.

It comes after Intu warned of its future if it could not raise extra funds, after reporting a £2bn loss for the year ending 31 December 2019, earlier this year.

The owner of Intu Lakeside and Manchester’s Old Trafford centre, said there was “material uncertainty” in relation to its ability to continue as a going concern.

It comes after Intu revealed it wrote down the value of its shopping centres by £1.9bn after a number of retailers that occupy space at its centres entered administration or issued CVAs. It also revealed that like-for like rental income decreased by 9.1% compared to the previous year.

As a result, Intu said it will try and raise extra cash through selling off more assets, refinancing its £4.5bn debt and negotiating with its lenders. Intu declined to comment on reports.

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