Merry Hill owner Intu set to default on debts amid virus impact

Merry Hill owner Intu has said it expects to breach covenants on its current debts as its shopping centres struggle in the face of the coronavirus pandemic.

The intu Merry Hill shopping centre is only partially open during the lockdown
The intu Merry Hill shopping centre is only partially open during the lockdown

Shares in the company nudged lower as it said that talks with its lenders over its finances are continuing.

The shopping centre owner said its sites remain closed, except for essential stores, but warned that the speed of the market recovery after the lockdown remains unclear.

Earlier this month, Intu secured debt waivers until June 26 but said it still expects to breach its debt commitments by this deadline amid falling rental payments.

The company, which also owns the Lakeside shopping centre in Essex and the Trafford Centre near Manchester, said it will standstill agreements with creditors to ride out the current crisis.

A standstill deal would allow it to halt testing and repayments of its debt facilities until no later than December 2021, it said.

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Intu is one of a number of shopping centre owners, such as Bullring and Grand Central owner Hammerson, which have been hard hit by the health crisis.

The retail landlord said the crisis heavily impacted its ability to secure rent payments in March, with some retailers choosing not to pay rents.

Some retailers have also collapsed into administration or confirmed that they will permanently shut stores in the aftermath of the crisis.

Intu was already under financial pressure as it came into the coronavirus pandemic, selling properties in the UK and Spain in recent years to help prop up its finances.

Shares in Intu were down 0.35% to 4.3p in early trading on Monday.

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