Administration is a common problem for companies
If a deal is not reached between the owner and lenders, Intu UXbridge Shopping Centre Uxbridge could be closed along with more than 12 other shopping centres nationwide.
Hillingdon’s shopping centre was reopened in June, along with other non-essential malls throughout the country.
The West London branch staff said that it felt like a Saturday and not a Monday, and that the atmosphere was “upbeat” on the day of the reopening.
Intu Properties said that its UK shopping centres may have to close again and the company must go into administration.
KPMG, an accounting firm, has been hired to prepare contingency plans to support Intu’s administration in the event of a failed deal.
Intu is currently in negotiations and is working with lenders to reach an agreement before Friday’s June 26 deadline. It must then pass financial tests.
The discussions focus on how long a potential standstill could last and how creditors might share in any future upside to shopping centre valuations. Intu stated that talks are ongoing to change the funding of shopping centres to make it possible to pay for staff and health.
Intu’s shopping centers are due for an updated valuation this month. This could lead to a breach of lending agreements.
Intu Properties spokesperson said that some centres have seen their rent collections drop due to Covid-19 and cash trapped in their financing arrangements, which limit their ability pay for support such as staff at shopping centres from other entities within the Intu group.
“Intu Properties plc and other central entities may be forced to cease operations if they are unable to do so.
Intu is hopeful of reaching a “standstill” agreement that lasts up to 18 months. However, the company stated that it is unlikely that this will be longer than 15 months.
Intu Uxbridge Shopping Centre owner warns
Uxbridge Shopping Centre owner has indicated that it could collapse if it does not have urgent funds.
Intu, which also manages Lakeside in Essex and Harlequin Shopping Center in Watford, has reported a loss in 2019 of PS2 billion.
The collapse was attributed to a weakness within the retail sector.
According to BirminghamLive, Intu plans to raise more money after a failed bid for a PS1 billion package.
Intu suffered a loss in 2018 of PS1.17 trillion. Its property value is now estimated at PS6.6 billion, a 22% decrease over last year.
Uxbridge shopping centre outlines plans for reopening
The staff will be able monitor and manage the number in the centre with precision at all times. It will also manage queues when the centre is full. There will be other measures such as floor stickers and one-way systems outside of stores.
More thorough cleaning will be done in key areas, as well as touch points such as escalators and toilets. These measures are still in effect for easy access to services such as pharmacies, banks and supermarkets.
At entrances and other locations throughout the centre, hand sanitation stands will be available.
Intu released research last week that showed that over 70% of regular shoppers would encourage hand hygiene, protective screens at tills and limits on the number of people allowed to enter shops at one time.
Over 60% of respondents support in-store security, cashless stores, and prefer a wait time of less than 10 minutes to enter a shop.
Uxbridge Shopping Centre has cinemas open and longer hours
It is the largest shopping centre chain in the UK, with 17 outlets in the UK and three in Spain.
Intu has until Friday for a new financial footing.
According to the company, “Intu properties plc will likely be unable to reach a standstill and it is possible it and other central entities will go into administration.”
“If this happened, then the administrators would need to be pre-funded by the group companies. There is a possibility that the centres could be closed if the administrator isn’t pre-funded.
Intu’s group companies offer key services to the site, including lighting, cleaning, health and safety systems, security, and maintenance.
Intu was struggling to fill some of the centres’ outlets before coronavirus and was in deep debt. In March, it stated that it was in discussions with lenders for new funding.
Intu stated Tuesday that despite the progress made, it had appointed KPMG as its administration plan.
Intu’s centres were closed partially after the coronavirus lockdown, and only essential stores remained open.
About 60% of the staff at the shopping centres were furloughed, while 20% of employees in the head office were.
Intu warns that shopping centre giant Intu could fail
The company’s financial woes include UXbridge Shopping Centre a loss in 2019 of PS2bn, failing to raise PS1bn earlier in the year and having outstanding debts of PS5bn.
Intu was one of many landlords left struggling to fill vacant space after the collapse and contraction in High Street retail outlets due to rising UXbridge Shopping Centre costs and an apparent ever-increasing popularity of online shopping. Many of the remaining tenants are having difficulty paying rent.