Shares in Trafford Centre owner tumble after £1.5bn fund raising is abandoned

Shares in the firm which owns the Trafford Centre and the Arndale Centre fell to an all-time low this morning after it emerged a plan to raise £1.5bn has been ditched.

Intu, which is fighting for survival due to a debt mountain of £5bn , has been forced to abandon the fund raising scheme due to a lack of appetite from the City.

As soon as the news was announced shares in the firm fell by 43 per cent.

The company has endured a terrible year which has seen the value of shares tumble by more than 90% over last 12 months.

Shares were recently trading at just 7.6p, giving the embattled company a market value of a little more than £100m.

Intu has warned that it might struggle to pay creditors this summer and is looking at selling of some of its assets to keep the business afloat.

The largest shareholder in the firm is Manchester based Peel Group.

The firm, which is led by Sir John Whittaker, was a part of two failed takeover bids for the business.

Last month Intu negotiated an extension of its overdraft with its lenders on condition the fundraising take place.

The announcement that the fundraising has been ditched has cast serious doubt on the future of the business according to Neil Wilson the chief market analyst at Markets.com.

He added: “No one wants a piece of shopping malls – no real surprise, the current financial market conditions are hardly helpful either. Wrong business, wrong time,” Wilson said.

Analysts at Liberum said: “July 2020 becomes the next key testing date for if breached, we expect banks will start taking control with further negative implications on larger UK shopping centre values, unless mitigating actions can be taken.”

Intu has been hit by a series of problems including the wave of administrations in the retail sector and two failed takeover bids.

The plummeting value of the firm’s property portfolio has exacerbated the situation.

Hong Kong-based Link Real Estate Investment Trust announced last month it was pulling the plug on plans to take part in the equity raise.

That announcement saw Intu’s shares fall by a third.

The company said losses widened by 72% to £1.95bn last year while total revenues fell from £581m to £541m.

Chief executive Matthew Roberts said: “We remain focused on fixing our balance sheet in the near term to ensure this business has the financial footing it needs to realise its significant potential.

“We will face further challenges in what has been an extraordinary few months for Intu and the wider sector.

“This is a compelling proposition and one that will stand the test of time. Operationally, our business is strong, delivering a resilient rental performance despite ongoing pressure from CVAs and administrations, with stable occupancy rates and footfall that consistently outperforms the benchmark.”