February 26, 2020 / 12:11 PM / a month ago

Britain's Intu could get revised loan ahead of equity raise plans

(Reuters) - Britain’s Intu (INTUP.L) said on Wednesday its lenders would extend a revolving credit facility to 2024 if the debt-laden shopping centre operator can successfully raise at least 1.3 billion pounds ($1.69 billion) through a cash call.

The owner of Manchester’s Trafford Centre said the revised 4-year loan of 440 million pounds would replace an existing 600-million-pound facility set to expire in October 2021.

London-listed Intu has struggled to reduce its debt amid increasing store closures on UK’s high street and as retailers focus on online sales to cut costs. Intu’s net debt stood at 4.68 billion pounds as of June 2019.

The company has been targeting an equity raise by the end of this month as it engages in discussions with shareholders, including its largest shareholder John Whittaker’s Peel Group, and potential new investors.

The company said the new revolving credit facility will be provided by Bank of America, Barclays, Credit Suisse, HSBC, Lloyds, Natwest and UBS - banks already involved in the current loan facility.

Intu shares briefly pared losses following the announcement, but slipped quickly to levels seen earlier in the session. The stock was down 7.5% at 13.9 pence as of 1212 GMT.

Rival Hammerson (HMSO.L) almost halved its 2020 dividend on Tuesday as it copes with store closures and looks to reduce its increasing debt.

Intu’s combined credit score, which measures on a scale of 100 to 1 how likely a company is to default on its debts in the next year, was “1”, Refinitiv Eikon data showed, indicating it was expected to default.

Reporting by Pushkala Aripaka and Samantha Machado in Bengaluru; Editing by Shinjini Ganguli and Saumyadeb Chakrabarty

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