intu’s shares suspended after Covid casualty goes under administration
The collapse has been cited as the biggest UK corporate casualty of the Covod-19 pandemic so far.
The share price plunged 72.38percent to 29cents on the JSE on Friday.
To put the meltdown into perspective, the share was trading at more than R13.50 a share 12 months ago.
Last Tuesday, intu had said it was still in discussions with stakeholders about a debt standstill, ahead of a revolving credit facility covenant waiver expiry that night. This waiver had been reached on May 1.
On Friday, the group said these discussions had continued through the week, but, “unfortunately, insufficient alignment and agreement has been achieved on such terms”.
An application was made for James Tucker, Michael Pink and David Pike of KPMG to be appointed as joint administrators to intu. Underlying group operating companies remained unaffected and all shopping centres would continue to trade.
intu, which has 17 shopping centres across the UK - including Lakeside in Essex, the Metrocentre in Gateshead and the Trafford Centre in Manchester - has debts of more than £4.5billion (R95.74bn), which it had struggled with for the past year and had attempted to reduce with asset sales.
The group also had to deal with ongoing Brexit uncertainty, which had the effect of lowering UK commercial property values, and structural changes to retail in the UK, including the move to online shopping and a weak consumer market in general.
It was also most recently hammered by lower rent payments from retail tenants as a result of the Covid-19 pandemic - its malls were semi-closed through a three-month lockdown in the UK, with only essential stores remaining open. The malls only reopened fully on June 15.
intu directly employs some 3000 people and had furloughed 60percent of employees in its malls and 20percent of those at its head office during the Covid-19 lockdown. Some 102000 people are employed by the group’s tenants.
The group said the suspension of its ordinary shares did not affect the listing and trading of the intu group’s listed debt securities, and no application had been made for the suspension of listing or trading of such securities.