CAPE TOWN - UK shopping centre landlord intu Properties plans to raise capital via the issue of equity alongside its full year results at the end of February.
Intus share price fell hard on the news - the price fell 6.1 percent to 400 cents on the JSE Monday morning.
The equity raise is part of its efforts to fix the balance sheet, the company said Monday in a market update.
“The company is engaged in constructive discussions with both shareholders and potential new investors on the proposed equity raise,” it noted.
Recent progress on the balance sheet includes the announcement in December of plans to dispose of intu Puerto Venecia, the biggest shopping centre in Spain, for €475 million, with intu’s share at €238m, with the rest going to co-owner the Canada Pension Plan Investment Board.
The proceeds will be used to repay debt and reduce loan to value by around one percent.
Nearly nearly £500m of disposals were achieved in 2019, with negotiations for the sale of intu Asturias, also in Spain, at advanced stages.
Intu CE Matthew Roberts said: “We have delivered a robust operational performance for 2019, finishing with a busy Christmas trading period. Total footfall in 2019 was 0.3 percent ahead of 2018, flat in the UK, which significantly outperformed the Springboard footfall monitor for shopping centres.”
Occupancy was stable at 95 percent and 97 percent of rent had been collected for the first quarter of 2020.
Intu owns several UK centres including Lakeside in Essex and Manchester’s Trafford Centre, but is battling falling rents and company voluntary arrangements (CVAs).
“We are making good progress with fixing the balance sheet, our number one priority, and are confident we have the right strategy in place to enable us to prosper as we see continued polarisation between the best destinations and the rest,” said Roberts.