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Trafford Centre might be forced to close as owners Intu ‘prepare administration plan’
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Intu, the owner of the Trafford Centre, has warned that the shopping centre may be forced to shut.
Intu has appointed KPMG to prepare a contingency plan for administration and has warned shoppers the famous Trafford Centre might be forced to close, the Manchester Evening News reports.
Intu Properties is currently struggling with £5bn debt and remains locked in crunch talks with lenders after being hard hit from the coronavirus pandemic.
The group also owns Lakeside shopping centre in Essex, and confirmed today they have KPMG on standby as administrator. It is currently negotiating details with lenders as it looks to secure breathing space ahead of a looming deadline on Friday.
Intu is hoping to arrange a ‘standstill agreement’ on terms of up to 18 months but said it’s likely this will only be 15 months.
Its lenders have explain that ‘there is a risk that centres may have to close for a period’ if they cannot reach an agreement.
Intu Properties is trying to negotiate a freeze on loan repayments, however increasing demands from landlords is reportedly making this unlikely.
The company put agreements with creditors on hold to ride out the coronavirus pandemic at the start of June, wavering debts until June 26th, however, according to reports it expects to breach debt commitments by this deadline amid falling falling rental payments.
The company announced in May ‘robust action’ against large tenant businesses who haven’t paid their rent during the coronavirus lockdown.
For the first quarter of the year, the company only received 40% of rent and services charges which were due by the end of March 2020.
The firm, which lost £2bn in 2019, warned in March it could collapse if it cannot find further funds.
A statement by Intu on May 18th said that: “in particular looking to achieve stability through standstill-based agreements with relevant financial stakeholders across its structures, at both the asset and group level.”
The standstill strategy statement says: “At this stage it is not expected that the duration will exceed 15 months.
“How the operations of individual centres are to be funded. Some centres haver educed rent collections as a result of Covid-19 and cash trapped under their financing arrangements which restrict their ability to pay for support (such as shopping centre staff) from other entities in the Intu group.
“Securing additional funding in centres funded by bond structures is more difficult to achieve and, in this connection, consent will be sought shortly from the stockholders of Intu Debenture PLC to authorise the trustee to release certain monies within the existing debt structure to be used for short term liquidity needs.
“Other centres may also require cash injections for these purposes. This all remains subject to further negotiations, with no certainty as to whether Intu will achieve a standstill, or on what terms or for what duration.
“Further announcements will be made as appropriate. Notwithstanding the progress made with lenders, Intu has also appointed KPMG to contingency plan for administration. In the event that Intu Properties plc is unable to reach a standstill, it is likely it and certain other central entities will fall into administration.
“In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres. If the administrator is not pre-funded then there is a risk that centres may have to close for a period.”
Intu Properties own nine of the country’s top 20 shopping centres and has been struggling with the shrinking high street retail market for some time.
Intu is laden with debts estimated to be around £5bn. The value of the shopping centres have fallen by £1.9bn due to the down turn of the market.
Commuters could be facing the steepest rise in the cost of train travel in more than a decade just months after prices were already increased.
It has been predicted today that train prices across England and Wales could rise by nearly 5% before the New Year.
The 2021 rise in prices was delayed as a result of the Covid-19 pandemic when train travel was at an all-time low, however, tickets still saw a price rise of 2.6% in March.
Abhijit Tembhekar / Flickr
And this morning, the Retail Prices Index for July 2021 was confirmed as 3.8% by the Office for National Statistics, meaning passengers could see fares rise by 4.8% in 2022, which would be the largest hike since 2012.
This means that the cost of rail travel could increase twice within ten months, and would see a Manchester-Glasgow off-peak return rise by £6.30 to £94.90, according to Metro.
Though all hope isn’t yet gone – changes to the fares in 2022 are still yet to be confirmed.
Jon David Houghton / Wikimedia Commons
A Department for Transport spokesperson said: “No decision has been made on national rail fares.
“The government is considering a variety of options and we will announce our decision in due course.”
This news has come as train travel in Manchester and beyond is on the rise – earlier this month, we reported that zero cases of Covid were found in Manchester Piccadilly Train Station, despite thousands of commuters using the station’s services as offices reopen.
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