Intu warns of mall closures, enlists KPMG ahead of debt deadline

By Yadarisa Shabong

(Reuters) - Intu Properties <INTUP.L> warned it may have to close some of Britain's best known shopping centres on Tuesday as it lined up KPMG as administrator in case it cannot reach a debt standstill deal with its creditors by a Friday deadline.

The owner of Manchester's Trafford Centre, Lakeside in Essex and other properties in Britain and Spain, with net debt of 4.69 billion pounds and losses of more than 2 billion pounds in 2019, said it had lined up KPMG as a "contingency".

Intu raised doubts about its future without new funding in March, even before the coronavirus lockdown.

It said on Tuesday that talks with its creditors on a debt standstill were continuing as the expiry of a debt waiver looms.

These talks began in May and Intu said the main sticking points were the duration of a standstill, how much creditors would share in any future recovery and funding.

Sky News reported this month that KPMG was seeking 12 million pounds in funding to keep some of Intu's best-known malls open.

Retailers were shut for nearly three months by the British government-imposed coronavirus lockdown, with some forced into administration, while others slashed costs and staffing and struggled to keep up their rent payments.

Intu's shares, which have collapsed in value this year, were down 2.3% at 0813 GMT, valuing the company at around 60 million pounds, from a 2006 peak of nearly 13 billion pounds.

Two years ago, rival mall operator Hammerson <HMSO.L> offered 3.4 billion pounds to buy Intu, which houses hundred of retailers and whose centres get millions of visitors a year.

Consultancy CBRE said a fall in the value of retail properties has seen prime British shopping centre yields rise to 6.5% from 4.5% in 2016 and prime high street yields reach 5.75%, from 4% in 2018.

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Patrick Graham and Alexander Smith)