UK mall owner Intu Properties says it has appointed KPMG to administer services to shopping centres in the event it is unable to reach a new debt agreement with lenders by a June 26 deadline.
While negotiations with lenders continued, the situation remained uncertain, and it was necessary to pre-fund the administrator to ensure that shopping centres are not forced to close for a period, the group said.
Intu’s debt pile stood at almost £4.5bn (about R100bn) at the end of December 2019, which compares unfavourably with its market capitalisation of R1.55bn on Tuesday morning.
If the group is unable to reach a standstill agreement on loan covenants, it was likely that Intu, and other central entities, would fall into administration.
Loan covenants refer to an agreement that imposes certain conditions on the borrower; for example, restricting them from breaching ratios used for measuring their ability to repay debt.
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