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On 10th February 2020, Intu Properties Plc shares spurted after the company, which is behind shopping centres, announced that they are in discussions with shareholders regarding an emergency cash call.
Previously, Intu Properties Plc has stated that it is expected to go for a cash call which likely to be worth of minimum £1 billion. Intu Properties Plc is in deep trouble with £4.7 billion of debt during a period when its retail tenants are shutting down stores due to increasing costs and customers transitioning to purchases on online platforms.
The portfolio of the company is estimated to be worth £8 billion, but now the value of the property is much lesser. However, shares of Intu Properties Plc rose by 29.25 per cent and closed at GBX 17.32 on 10th February 2020 after the announcement was made on the same day, which helped the company to increase its market value to almost £234 million.
The share price of the company has dropped by almost 85 per cent in the year 2019 because few of its primary tenants such as House of Fraser, the Topshop owner, Arcadia and Debenhams have gone through urgent restructuring exercises. This has led to some stores being shut down while some other clients demanded rent cuts.
The debt-laden company, Intu Properties Plc stated that it was âinvolved in productive conversations with the investorsâ. It involved its largest shareholder Peel Group and new shareholders that consist of Link Real Estate Investment Trust, which is a Hong Kong-based company. The Peel Group is operated by the seventy-seven-year-old billionaire, John Whittaker and who owns a 27 per cent stake in the business. John Whittaker was the main reason for the Trafford Centre advancement and later sold it to Intu Properties Plc in the year 2011.
The group first said in January 2020 that it would seek an equity capital raise in order to overhaul its balance sheet, though it did not stipulate a figure. But as per media reports, property analysts have projected that the company needed to raise between £1 billion to £3 billion in order to support its finances.
The company also stated that it persists in thinking about all possibilities to place itself in the best situation to deal with short- and medium-term liquidity requirements as the company moves toward next material debt maturity in the early part of 2021.
However, Intu Properties plc advised that, âthere can be no assurance that the equity raising exercise will fructify.
Intu Properties Plc manages fourteen shopping centres throughout the United Kingdom, in cities from Norwich to Nottingham and It has been selling assets to reduce its debt.
At the end of January 2020, the company sold a shopping centre in Spain for â¬290 million (£245.3 million) to bring down its debt. The agreement will look at the company pocket net proceeds of â¬85 million, following the settlement of asset-level debt, taxation and working capital adjustments.
INTU â Overview of Intu Properties PlcÂ
Intu Properties Plc (LON:INTU) manages and owns the countryâs best shopping centres. The company has an increasing multichannel existence and a developing portfolio in Spain. The company is very much enthusiastic regarding providing the best shopping experience to people. With around 20 centres throughout Spain and the United Kingdom, the companyâs entire business is concentrated on establishing the best places for leisure and shopping, so that customers come again and again. The companyâs distinctive visitor understanding helps it to figure out what visitors would look for now and in the coming future.Â
INTU âNews Updates
On 3rd February 2020, the company announced that it had completed deal regarding the sale of Asturias shopping centre to the ECE European Prime Shopping Centre Fund II (âECEâ).
This news came after the announcement on 28th January 2020, when the company announced the information regarding disposal of Intu Asturias.
Affiliates of Intu Properties Plc and Canada Pension Plan Investment Board which have formed a joint venture company, have exchanged agreements to sell the Intu Asturias shopping centre to ECE for â¬0.3 billion (Intu share â¬0.15 billion).
This disposal follows the contract for the sale of Intu Puerto Venecia for â¬0.475 billion (Intuâs share â¬0.237 billion).
For the year ended 31st December 2019, Intuâs fifty per cent share of the aggregate net rental income for Intu Asturias and Intu Puerto Venecia was â¬19.3 million.
INTU â Trading Updates
On 06th November 2019, the company announced its trading activities for the period - 1st July 2019 - 5th November 2019.
The footfall in the companyâs centres was 0.9 per cent ahead in the nine months ended 30th September 2019, which was ahead of the nine months ended 30th September 2018. In the United Kingdom, footfall was higher by 0.4 per cent.
The footfall expansion in Spain has resulted from AliExpress at Intu Xanadu, where footfall was higher by 20 per cent in the first six weeks of inauguration. The growth in United Kingdom had resulted from the companyâs management initiatives.
The Rental uplift on rent reviews settled, increased by 6 per cent in the nine months ended 30th September 2019 as compared to the 8 per cent in the nine months ended 30th September 2018.
The occupancy was 95.1 per cent as at 30th September 2019 (EPRA basis) as compared to 97.0 per cent as at 30th September 2018. However, it remained unchanged from June 2019.
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INTU - Stock Price Performance
On 11th February 2020, at around 08:34 AM (GMT), by the time of writing this report, the stock of Intu Properties Plc was trading at a price of GBX 17.65 per share on the London Stock Exchange, an increase in the value of around 1.90 per cent or GBX 0.33 per share, as opposed to the closing price of the stock on the previous trading day, which has been reported to be at GBX 17.32 per share.
At the time of writing, the market capitalisation of Intu Properties Plc was £234.7 million with regards to the current market price of the stock. The free float and outstanding shares of Intu Properties Plc were reported at 736.7 million and 1.36 billion, respectively.
The share price of Intu Properties Plc recorded at GBX 122.15 as on 19th February 2019 was its 1-year peak price, whereas the share price recorded at GBX 11.27 as on 11th February 2020 was the 1-year low share price. The current share price was lower by 85.6 per cent from the 1-year high price, whereas the current share price was higher by 56.6 per cent from the 1-year low price.
The beta of the stock has been reported at a value of 0.78, representing the fact that the movement of the share price of the company is of lower volatility when compared with the movement in the comparative benchmark index.
