Funding call from shopping centre group’s ‘administrator-in-waiting’

The proposed administrator of shopping centre giant Intu has reportedly requested a multimillion-pound funding line to keep malls open during a potential insolvency process.

Last week Intu Properties, which employs nearly 3,000 people, was said to be lining up KPMG to handle an insolvency process if lenders refuse to grant a standstill on its vast debt obligations of £4.5bn.

Today, Sky News reports that KPMG has made the funding call to Intu bondholders in the vehicles which directly own the Trafford Centre, in Manchester, and Intu Metrocentre in Gateshead.

It is claimed KPMG is looking for funding in the region of £12m.

Without the funding it could mean Intu would not continue operating some of its 17-strong UK estate during an administration process.

Sky quoted an insider as saying that the funding request was designed to “focus minds” as Intu’s lenders consider whether or not to grant an 18-month standstill on the company’s £4.5bn debt mountain.

“Administration would be an expensive option,” they said.

The retail centre group also owns the Arndale shopping centre in the heart of Manchester.

It was keen to appoint an administrator-in-waiting faced with the prospect that its lenders might not agree to a stay of execution later this month.

The group also faces a problematic end of the month with the latest quarterly rental date looming.

With most retail centres having been closed since lockdown, many tenants, including Sir Philip Green’s Arcadia Group, Boots The Chemist, New Look and McDonald’s, have withheld rent payments.

Its previous rent quarter day in March resulted in less than a third of the money it was owed by its tenants being paid.

Sky said Intu and KPMG both declined to comment.