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On 26th February 2020, the seven existing financing banks have agreed to provide £440 million in revolving credit facility to Intu Properties Plc (LON:INTU) over fours year till 2024. The revolving credit facility is conditional on the company being able to raise at least £1.3 billion in a rights issue to existing shareholders. It will supersede the companyâs current £0.6 billion revolving credit facility that runs until October 2021. The name of seven existing banks are Barclays, Lloyds, NatWest, Credit Suisse, Bank of America, HSBC and UBS.
However, the company is under pressure because of a £4.7 billion debt and the approximately 90 per cent reduction in share price in the last twelve months. The company is also struggling with a few of its largest tenants which includes Topshopâs owner, Arcadia, and Debenhams, House of Fraser. These tenants have suffered a lot due to closed stores, emergency restructurings or have demanded lease rent cuts.
The chief executive of Intu Properties Plc, Matthew Roberts commented that âthe revolving credit facility extension is a significant achievement of the company, and it will be tackling its near refinancing needsâ. He further said that âthe modified credit facility will expand the maturity profile and will be utilised to deliver general liquidity for the company. Also, maintaining the financial statementâs balance sheet is the companyâs foremost importance, and it will stay involved with the new investors and shareholders with respects to the expected equity raiseâ.
As per media report, property consultancy Green Street Advisorâs analyst Rob Virdee stated that the banks who lent smaller amount to the company also indicated that they did not want to augment their exposure to Intu Properties Plc. The analyst further said that raising of £1.3 billion mandated amount would not be adequate to solve the companyâs debt problems in the short run.
The increasing expenses of operating stores for retailers, the shift to online shopping and weaker customer expenditure have translated into a crisis at upmarket stores in national retail chains, lower rents and higher empty spaces at the companyâs shopping centres.
Intu Properties Plc, the owner of shopping centres which include Lakeside in Essex and Trafford Centre in Manchester, has been disposing of few of its assets to reduce its debt obligation and to raise cash. As per media report, it is believed that a £1 billion cash would not be enough for the company. The company must take additional actions to stabilise its finances.
INTU - Stock Price Performance
(Source: Thomson Reuters)
On 28th February 2020, at around 11:16 AM (GMT), by the time of writing this report, the stock of Intu Properties Plc traded at a price of GBX 11.61 per share on the London Stock Exchange, a decrease in the value of around 9.37 per cent or GBX 1.20 per share, as opposed to the closing price of the stock on the previous trading day, which has been reported to be at GBX 12.81 per share.
At the time of writing, the market capitalisation of Intu Properties Plc was GBP 173.58 million with regards to the current market price of the stock. The free float and outstanding shares of Intu Properties Plc were reported at 736.67 million and 1.36 billion, respectively.
The share price of Intu Properties Plc recorded at GBX 118.0 as on 04th March 2019 was its 1-year peak price, whereas the share price recorded at GBX 11.0 as on 13th February 2020 was the 1-year low share price. The current share price was lower by 90.16 per cent from the 1-year high price, whereas the current share price was higher by 5.55 per cent from the 1-year low price.
The beta of the stock has been reported at a value of 0.97, representing the fact that the movement of the share price of the company has lower volatility as compared with the movement in the comparative benchmark index.
INTU â News Update
On 28th January 2020, the company announced disposal of Asturias shopping centre. A JV company established through affiliates of Canada Pension Plan Investment Board and Intu properties Plc, has agreed to dispose of this centre to the ECE European Prime Shopping Centre Fund II. The sale price was reported to be at â¬290.0 million (Intuâs share â¬145.0 million).  On 3rd February 2020, the company completed the sale of its interest in the same.Â
INTU â Market Update
On 20th January 2020, the company announced the market updates regarding the progress it has made to improve its balance sheet.
The company informed in its update that it was involved in discussion with both new investors and existing shareholders on the proposed program for equity raising.
In December 2019, the company entered into agreements to sell off Intuâs Puerto Venecia for â¬475 million (Intuâs share: â¬238 million). The company further announced that the net receivables from this transaction would be utilised to pay back debt and is anticipated to decrease loan to value ratio by 1 per cent.
In the entire year of 2019, the company had disposed of approximately £500 million of assets.
Matthew Roberts, Chief Executive Officer, commented on the market update that the company had provided robust performance in the year 2019 with the very hectic trading period during the Christmas season. The total footfall in the year 2019 was reported at 0.3 per cent more than that in 2018. The occupancy rate was also steady at 95 per cent, and for the first quarter of 2020, the company has collected 97 per cent of rent payment on the reported date which showed lesser risks regarding the current customer base.
INTU â Overview of Intu Properties Plc
Intu Properties Plc (LON:INTU) operates and owns several of the countryâs beautiful shopping centres. The company has attained a multichannel presence and a footprint in Spain. The companyâs objective is to deliver the best shopping experience to the people. Intu Properties Plc has 20 shopping centres spread across Spain and the United Kingdom. Through these centres, the company concentrates on creating the most desirable places of leisure and shopping for visitors. As per the company information, there are around 400 million visits into these shopping centres every year and the company endeavours to understand what the shoppers want from a services viewpoint. For that, Intu Properties Plc continually invests in its shopping centres to develop a long-standing business which supports customer communities to thrive and its business to expand.
