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Hammerson has confirmed that it is holding advanced discussions regarding a possible disposal of a stake in a European arm of its business, after suffering from unpaid rents amid the coronavirus crisis.
The shopping centre landlord is now looking to sell a 50% stake in VIA Outlets to joint venture partner APG.
In addition to the potential disposal, the shopping centre landlord said it was also considering a possible equity raise through an upcoming rights issue.
Sky News first revealed over the weekend that Hammerson was drawing up plans for a rights issue in a bid to raise more than its current market capitalisation.
One investor speculated that the group could seek between £500m and £600m for the cash call.
In response to recent press speculation, the group confirmed the move, adding that it continues to take “proactive” measures in managing its cost base and cash-flow, and recently secured approval for the issuance of up to £300m under the Covid Corporate Finance Facility (CCFF).
The group added that footfall and sales have “continued to improve” since reopenings across Europe, while third quarter rent collection in the UK has increased to over 30%, excluding monthly payments and deferrals.
Nonetheless, Hammerson has seen its shares slump by 70% during the past year, having last month collected only 16% of the rent it was owed by retail tenants ahead of the third quarter.
News of the cash call comes only weeks after rival Intu fell into administration.
The retail property giant first issued a statement stating that it was “likely” that the group would appoint administrators, after admitting that it had so far failed in reaching standstill agreements with landlords.
Further to the announcement, it confirmed the appointment of James Robert Tucker, Michael Robert Pink and David John Pike of KPMG as joint administrators.
Earlier this year, 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.
