Intu braces for administration

Intu has placed administrators on standby as a “contingency plan” in the event that discussions with lenders fail.

Reports that the group placed KPMG on standby first surfaced earlier this month. 

The shopping centre owner has now confirmed that KPMG has been brought in after stating that a failure to reach a standstill agreement would mean it is “likely” it will fall into administration.

Earlier this month, Intu announced that it had entered discussions with lenders in an effort to “achieve stability” through standstill-based agreements across its structures. 

It has now been looking to progress this standstill strategy ahead of its revolving credit facility covenant waiver deadline on 26 June.

Discussion points have included the duration of the standstill, the extent to which creditors will share in a future valuation recovery and how individual shopping centres would be funded. 

In its latest update, however, Intu said: “This all remains subject to further negotiations, with no certainty as to whether intu will achieve a standstill, or on what terms or for what duration. 

“Further announcements will be made as appropriate.”

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.

At the time, Intu said there was “material uncertainty” in relation to its ability to continue as a going concern.