Intu Properties PLC (LON: INTU) – Lands into administration after it fails to seek a standstill agreement

Summary

  • Intu Properties fells into administration.
  • KPMG LLP appointed as the administrator.
  • Trading of shares suspended on the London Stock Exchange and Johannesburg Stock Exchange.
  • Listed Debt securities remain unaffected and will continue to trade.
  • Shopping centres will remain operational.

Intu Properties PLC is a UK based Real Estate Investment Trust (REIT), which owns, develops and manages shopping centres in the UK and Spain. The Group was founded in the year 1980 and listed on the London Stock Exchange in the year 1999. Intu owns some of the signature properties in the UK, which includes Intu Lakeside, Intu Merry Hill, St David’s Cardiff, Intu Trafford Centre and Intu Metro Centre.

Latest Events Summary

26th June 2020, the discussion of Intu properties PLC seeking a standstill agreement with the Group creditors didn’t prove fruitful, and no conclusion was reached. The Board announced to appoint administrators to protect the interest of the stakeholders.

23rd June 2020, Intu Properties PLC outline plans for standstill agreement with the financial stakeholders to achieve financial steadiness. However, Intu also points out doubt over achievement of the standstill agreement. Besides, Intu also appointed KPMG if there is a possibility for administration if a standstill agreement does not materialize. It stated that in the event of Intu seeking administration it will be required to pre-fund the administrator to provide services to the shopping centres and if Intu fails to pre-fund the administrator, there is a risk that the centres will be closed for some time.

18th May 2020, Intu Properties PLC gives heads-up that it will go for a standstill agreement with the financial stakeholders to achieve financial stability. The standstill agreements will act as a form of defence, and it would provide relief from covenant stress testing, amortization of debt and maturity payment facility. However, Intu throws light that the achievement and course of seeking a standstill agreement remains uncertain.

1st May 2020, Intu Properties PLC seeks covenant waiver on the Revolving credit facility due to expire on 26th June 2020. Intu Properties PLC was in discussion to explore other options, including standstill agreement with the stakeholders at multiple levels to overcome market turbulence.

KPMG appointed as the administrator

On 26th June 2020, the Intu Properties PLC announced that it had made an application to appoint KPMG LLP as the joint administrator to Intu Properties PLC and few of the subsidiaries of the Intu Group. James Robert Tucker, Michael Robert Pink and David John Pike from KPMG LLP will be part of the administrator team. The shopping centre operating companies of the Group are not entering administration, and thus they will continue to operate the shopping centres. The shopping centre operating companies are likely to come into provisional service agreements with the administrators for the uninterrupted operation of the shopping centres.

Impact on the listing of Intu’s ordinary shares

  • The trading of ordinary shares of Intu Properties PLC on the London Stock Exchange has been suspended as per the guidance by the Financial Conduct Authority.
  • The trading of ordinary shares of Intu Properties on the Johannesburg Stock Exchange has been suspended as per the guidance by the Main Board of the Johannesburg Stock Exchange.

No impact on the Debt securities and they will continue to trade. The Group’s listed debt securities include:

  • Guaranteed Convertible Bond of GBP 350 million due in 2022 is listed on The International Stock Exchange. Intu Jersey Limited issued the debt.
  • First Mortgage Debenture Stock of GBP 354,876,000 at 5.562 per cent, which is listed on the Official List and traded on the London Stock Exchange. Intu Debenture PLC issued the debenture.
  • Multiple series of commercial mortgage-backed notes issued by The Trafford Centre Finance Limited.
  • Intu (SGS) Finance PLC issued Notes of GBP 450 million at 3.875 per cent, GBP 350 million at 4.625 per cent and GBP 350 million at 4.25 per cent due in 2028, 2033 and 2035, respectively.
  • Fixed-rate bonds of GBP 485 million at 4.125 per cent issued by Intu Metrocentre Finance PLC. The bond is listed on the Irish Stock Exchange (ISE) and due in 2028.

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