Intu shares jump as it confirms talks over £1bn emergency cash raise
Retail landlord Intu this morning confirmed that it was in talks with a number of investors over its £1bn emergency cash call.
The property giant said that it was in “constructive discussions” with shareholders including the Peel Group and Link Real Estate Investment Trust (Link REIT) regarding a proposed equity raise alongside the firm’s full year results at the end of February.
The statement comes after the Times reported yesterday that Intu was in talks with Link REIT about becoming a “cornerstone investor” in next month’s raise.
Shares in the property firm shot up 17 per cent on the back of the news.
Peel Group, which owns a 27.3 per cent stake in Intu, is expected to support the cash call, but private equity firm Orion is reportedly unlikely to back the fundraising effort.
The Intu shareholder is currently in talks with Intu’s shopping centre rival Hammerson to buy seven of Hammerson’s retail parks.
Link is understood to be involved in discussions as it seeks to expand outside Hong Kong and mainland China. The real estate investor paid £354m for a Sydney office space in January.
In it November results the firm, which focuses on shopping centre management and development, said that fixing its balance sheet is its “number one priority”.
“We continue to consider all options to put us in the best position to deal with both our short and medium term liquidity requirements as we approach our next material debt maturity in early 2021,” the company said.
At the end of January the firm sold a shopping centre in Spain for €290m (£245.3m) in an attempt to bring down its debt.
The deal will see the company pocket net proceeds of €85m, after the repayment of asset-level debt, working capital adjustments and taxation.
Intu warned “there can be no certainty that the equity raise will be implemented nor as to the terms on which any such implementation might occur”.