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UK shopping mall giant Intu says facing collapse
[LONDON] British shopping centre giant Intu, already hit hard before the coronavirus lockdown, warned Friday that it was on the brink of collapse after talks failed to restructure its finances.
The debt-laden firm, which owns 17 giant shopping malls including MetroCentre and the Trafford Centre in northern England and Lakeside in the south-east, was seeking to progress talks with creditors before a midnight deadline.
Intu employs around 2,500 staff but another 100,000 people work at shops and restaurants inside its facilities, while another 30,000 are involved on the supply side.
Shopping centres in Britain were forced to mostly close for almost three months after the government imposed a nationwide lockdown on March 23 in a bid to halt the Covid-19 outbreak -- further hurting Intu which has been in trouble for some time as people increasingly shop online.
Lockdown restrictions began to ease this month but it would appear too late to save Intu.
In a statement on Friday, Intu announced that "insufficient alignment and agreement has been achieved" with its creditors.
"The board is therefore considering the position of Intu with a view to protecting the interests of its stakeholders," it added.
"This is likely to involve the appointment of administrators. A further announcement will be made as soon as possible."
Administration is the process whereby a troubled company calls upon independent financial help in a bid to restructure the business, remain operational and to try to minimise job losses.
Intu on Tuesday said that some of its shopping centres "have reduced rent collections as a result of Covid-19", adding that malls may be forced to shut.
KPMG has been put on standby in case the group enters administration, while there was also "a risk that centres may have to close for a period", Intu stated earlier in the week.