Intu in ‘constructive discussions’ over £1bn equity raise

The Trafford Centre operator confirmed it is in talks with Hong Kong-based Link Real Estate Investment Trust, alongside existing shareholder Peel Group, over a £1bn fundraising drive.

Intu, which also co-owns the Manchester Arndale with M&G Real Estate, is understood to be looking for between £1bn and £3bn, with an equity raise to be launched at Intu’s AGM later this month.

The shopping centre owner has faced a share price drop of 90% in the last year, as well as a decrease in the value of a number of shopping centres within its 14-asset UK portfolio. At last estimation, the retail business’s debt was valued at £4.7bn.

Intu’s 2018 financial results saw a £1.1bn loss, and the value of its portfolio written down from £10.5bn to £9.2bn.

Peel Group, which developed the Trafford Centre before selling the scheme to Intu in 2010, has a 27% stake in Intu.

In a statement to the stock market this morning, Intu responded to an article in The Times which revealed the talks with Link REIT, and said: “Further to recent press speculation, Intu Properties confirms that it is engaged in constructive discussions with shareholders, including the Peel Group and others, and new investors including Link Real Estate Investment Trust and others, in relation to a proposed equity raise alongside Intu’s full year results at the end of February.

“The company will make further announcements in due course, as appropriate. There can be no certainty that the equity raise will be implemented nor as to the terms on which any such implementation might occur.”

In a November trading update, Intu warned of a likely drop in rental income for 2019, and said selling assets and a potential equity fundraise was part of its solution to deal with “short and long term liquidity requirements.”

Shares in Intu were up 0.9p to 14.30p this morning.