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* Intu says to seek other sources of funds
* Blames uncertainty in markets for failure of fund raising
* Shares fall nearly 40% to record low
(Adds insolvency expert comments, details on debt, valuation)
By Yadarisa Shabong
March 4 (Reuters) - One of Britain's biggest shopping mall
operators, Intu Properties, has failed to secure vital new
funding and said on Wednesday it was in danger of breaching debt
commitments due in July because of the tough climate for UK
retailers.
Shares in the London-listed firm, which owns
Manchester's Trafford Centre, Lakeside in Essex, and another 18
properties in Britain and Spain, fell 30% to a record low at
1410 GMT.
Intu said it would seek other sources of financing,
including looking at selling assets, and take mitigating actions
which may include negotiating debt waivers where appropriate.
The company was stuck with a 4.5 billion pound ($5.77
billion) debt pile at the end of 2019 and had planned to raise
between 1 billion and 1.5 billion pounds to shore up its balance
sheet after being hit by high-profile failures in the retail
industry and rent renegotiations.
At its peak in 2006, Intu had a market value of nearly 13
billion pounds which had plummeted to around 81 million pounds
on Wednesday.
It had been in talks for new equity funding with its largest
shareholder John Whittaker's Peel Group and also with new
investor Hong Kong-based Link Real Estate Investment Trust.
Having made a 2.9 billion pounds approach for the company in
2018, Whittaker later walked away. Rival Hammerson also
abandoned a 3.4 billion pounds takeover offer in 2018.
"The board believes the current uncertainty in the equity
markets and retail property investment markets precluded a
number of potential investors from committing capital into the
business," it said in a statement, adding: "Intu will continue
and broaden its conversations with its stakeholders."
Intu has been hit by company voluntary agreements - an
insolvency procedure used by retailers to force renegotiation of
leases - from brands including Debenhams, Toys R Us, House of
Fraser and HMV.
Other retailers are increasingly shifting online to cut
costs.
"If the high street cannot be revived, into the experience
shoppers desire, it is likely other large shopping centres could
follow suit," said insolvency director Chris Horner at Business
Rescue Expert.
Intu, which also owns the out-of-town Merry Hill centre,
said it had nearly 190 million pounds of debt due to be repaid
or refinanced within the next 12 months.
Its combined credit score, which measures on a rising scale
of 1 to 100 how likely a company is to pay its debts in the next
year, is "1", Refinitiv Eikon data showed, indicating it is
expected to default.
The company said that, apart from the challenges caused by
tenants going bust, its income has been "resilient in what has
been a challenging year for retail and retail property".
Footfall at its centres through the first eight weeks of
2020 increased by 0.9% compared with the same time last year,
but occupancy at the end of last year fell to 95% from 97% in
2018 due to store closures.
It pushed back its full year results announcement to March
12 from March 5.
($1 = 0.7793 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Patrick
Graham and Elaine Hardcastle)
