Some of the UK's best known shopping centres are at risk of potential closure, after retail giant Intu warned it will have to call in the administrators if it cannot reach a rescue deal with lenders.
Intu - which owns the Trafford Centre, Lakeside and 16 other malls - is trying to negotiate a freeze on loan repayments with banks but coronavirus restrictions, as well as demands from landlords is increasingly making this unlikely.
The company, which is £4.5billion in debt, said a deadline of June 26 has been proposed, after which point administrators could be called in.
It previously also warned it expects the amount it collects from rents and service charges to tumble by £181.6million this year.
"Notwithstanding the progress made with lenders, Intu has made with lenders, Intu has also appointed KPMG to contingency plan for administration," a statement said on Tuesday.
"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," the company warned.
If Intu goes into administration, the various group companies would have to put money into KPMG to raise £12million additional funding.
"If the administrator is not pre-funded then there is a risk that centres may have to close for a period."
Intu has been heavily impacted by tough trading conditions, which have been exasperated by the Covid-19 crisis.
The company has faced difficulties as some of its biggest tenants, including Debenhams, House of Fraser, and Topshop’s owner, Arcadia, have undergone emergency restructurings, closed stores or requested rent reductions.
The move to online shopping, the rising costs of running stores for retailers and weaker consumer spending have led to a high-street crisis at national chains, and lower rents and higher vacancies at Intu centres.
