Metrocentre and Eldon Square operator intu has warned its shopping centres could close after moving closer to going into administration.
The company, which owns a number of shopping centres around the UK and Spain, was suffering from huge debts even before the coronavirus outbreak.
Since the lockdown, the company's rental income has plunged and last month it announced it was talking to its banks on a “standstill” agreement that would see it get relief on its debts for the next 18 months.
Now the company has released a statement saying that there is “no certainty as to whether intu will achieve a standstill, or on what terms or for what duration.”
It has appointed accountants KPMG as possible administrators if it cannot get agreement on its debts and says that “centres may have to close for a period” if funding to keep them going does not materialise.
The company added: “Notwithstanding the progress made with lenders, intu has also appointed KPMG to contingency plan for administration.
“In the event that intu properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration. In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres.
“If the administrator is not pre-funded then there is a risk that centres may have to close for a period.”
Eldon Square and the Metrocentre re-opened to shoppers last week with new measures in place to ensure social distancing.
