By Kristy Dorsey
The owner of Braehead retail and leisure centre near Glasgow has confirmed it is in talks with a Hong Kong property giant to raise funds to cut its £4.7 billion debt pile.
Responding to renewed press speculation that a £1 billion cash call could be in the offing, Intu Properties said it is in talks with Link Real Estate Investment Trust “and other” new investors to launch a fresh equity fundraising at the end of this month alongside its full-year results. Property tycoon John Whittaker’s Peel Group, which owns 27.3% of Intu, is also involved in the discussions.
In a brief announcement to the London Stock Exchange, Intu described the talks as “constructive”.
Intu owns several major shopping centres throughout the UK and Spain, including the Lakeside in Essex and the Trafford Centre on the outskirts of Manchester. The latter was purchased in 2011 for £1.6 billion from Peel Group, which is currently Intu’s largest investor.
“The company will make further announcements in due course, as appropriate,” the statement concluded. “There can be no certainty that the equity raise will be implemented nor as to the terms on which any such implementation might occur.”
Link Real Estate Investment Trust is listed in Hong Kong, and has a market capitalisation of approximately £17 billion.
Investors have been fearful of putting money into retail real estate, where returns have been severely hampered by waves of closures that led to thousands of job losses last year.
Some names, such as Mothercare and Karen Millen, have disappeared altogether. Many others, such as Philip Green’s Arcadia Group, have staved off administration by closing large numbers of stores and negotiating lower rents through insolvency plans known as Company Voluntary Arrangements (CVAs).
Intu, whose shares have fallen by nearly 90% in the past year, hopes to regain some appeal among investors by reducing its debt pile. However, issuing new shares to raise extra cash also tends to push down the stock price, which doesn’t always go down well with existing shareholders.
Shares in Intu rose by nearly a quarter yesterday, adding 3.92p to close at 17.32p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here