Intu will take more 'robust action' to enforce legally binding leases
CAPE TOWN - Intu, which owns leading shopping centres in the UK, said Monday it might have to take “more robust action” to enforce legally binding terms of leases, where customers at its leading UK shopping centres were refusing to pay rent.
The group’s UK centres all remain semi-closed through the Covid-19 crisis, with only stores selling essential goods still open. The share price on the JSE increased 1.6 percent to R1.27 Monday morning.
The group said in an update Monday it was dealing with a “very small number of cases” where customers were not engaging with Intu, to find a consensual solution regarding rents.
“These are large, well-capitalised brands that have the ability to pay but have chosen not to,” intu’s directors said.
The group, which has been forced to seek a waiver on revolving credit facility payments, said had received 40 percent of rent and service charges for the quarter.
It was now offering monthly rents until the end of 2020, and discussions were at an advanced stage with customers representing a further 28 percent of rents due.
The remainder of customers were at various stages of discussions about revised payment plans.
Leave of absence had been granted to around 60 percent of staff in the centres, and around 20 percent of head-office staff. In addition, the board had agreed to a 20 percent salary reduction for the next three months, while £3 million of short term cost savings had been identified.
Service charge costs were being reduced, with savings passed on to customers.
Regulatory approval for the disposal of intu Puerto Venecia in Spain had been approved and the aim was to close the transaction in the middle of David Hargrave, with 20 years experience as a partner in the restructuring practices of both PwC and EY, specialising in business turnarounds in many sectors, had been appointed as Chief Restructuring Officer.
He had also been appointed to the board as a non- executive director.