Lakeside, Manchester Arndale and the Trafford Centre are amongst shopping centres that could be forced into closure, after retail giant Intu warned it will have to call in the administrators if it cannot reach a rescue deal with lenders.
The debt-laden shopping giant today said it was likely to collapse into administration following the failure of talks with lenders, in a move that could be devastating for the high street following months of losses from the coronavirus pandemic.
The company, which has £4.5billion worth of debt is facing a huge fall in rents from struggling retailers.
It previously also warned it expects the amount it collects from rents and service charges to tumble by £181.6million this year.
In the past quarter, it has been desperately trying to persuade lenders to freeze its loan agreements ahead of a midnight deadline on Friday.
A statement said said: "Since that update, discussions have continued with the Intu group's creditors in relation to the terms of standstill-based agreements. Unfortunately, insufficient alignment and agreement has been achieved on such terms."
"The board is therefore considering the position of Intu with a view to protecting the interests of its stakeholders. This is likely to involve the appointment of administrators. A further announcement will be made as soon as possible."
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.
In total, the business has more than 3,000 workers UK wide, with a further 102,000 employed at its various shopping centres.
Full list of Intu shopping centres at risk of closure
- intu Braehead Glasgow
- intu Broadmarsh, Nottingham
- intu Chapelfield, Norwich
- intu Derby
- intu Eldon Square, Newcastle
- intu Lakeside, Essex
- intu Merry Hill, West Midlands
- intu Metrocentre, Gateshead
- intu Milton Keynes
- intu Potteries, Stoke on Trent
- intu Trafford Centre, Manchester
- intu Uxbridge
- intu Victoria Centre, Nottingham
- intu Watford
- Manchester Arndale
- St David's, Cardiff
- The Mall, Cribbs Causeway
