Shares in national shopping centre owner Intu Properties have slumped by more than 25% after it announced that a major Hong Kong investor will no longer invest in the business.
The firm yesterday responded to weekend reports that Link Real Estate Investment Trust was in discussions with the shopping complex giant, apparently signalling the investor would be taking part in a major fundraise at the end of this month.
The fundraise is being carried out by Intu in an attempt to pay down its huge £5bn debt pile, which has already seen it sell off two Spanish shopping centres in Zaragoza for £405m and Oviedo for £246m.
However, Intu - owner of the Trafford Centre in Manchester, The Mall at Cribbs Causeway in Bristol, Merry Hill centre in Dudley and Gateshead's Metrocentre, among others - has now issued an update on the press speculation, saying: “Further to yesterday’s announcement, Link Real Estate Investment Trust has informed intu of its intention to no longer participate in a recapitalisation of the company.
“Intu remains engaged with shareholders and potential new investors in relation to a proposed equity raise. The company will make further announcements in due course, as appropriate.”
Following the announcement shares tumbled by 25.7% to 12.86p.
Link and Intu had previously held what were described as “constructive discussions”, with biggest shareholder Peel Group also involved. It was understood that Link was in talks to become the “cornerstone” investor in the fundraising round, working alongside John Whittaker’s Peel Group, which already owns 27.3% of Intu.
Intu, which runs Intu Derby, Eldon Square in Newcastle and Lakeside in Essex, has suffered in the last year following the demise of several big-name retailers,while others push through insolvency plans known as company voluntary arrangements (CVAs) to bring down rents.
Meanwhile successful retailers, including Hotel Chocolat and Next, have demanded their own rent reduction, arguing they should not be penalised with higher bills for being successful.
A spokesperson for Link said: “Link remains interested in opportunities in the UK, but our negotiations with Intu have not reached an agreement.”
