UK shopping centre owner Intu became the latest casualty of the coronavirus crisis today as it goes into administration after failing to secure a debt repayment holiday from its creditors amid falling rents.
Intu owns Manchester's Trafford Centre, Lakeside in Essex, out-of-town Merry Hill centre and several other properties across Britain and Spain.
It said today that all its shopping centres would continue to trade.
The UK firm employs around 2,600 staff and has hundreds of retailers in its centres that get millions of visitors a year.
It was concerned about its financial prospects even before the coronavirus crisis but the ensuing lockdown has put a further stress on its finances as rental payments collapsed due to store closures that lasted for nearly three months.
According to trade publication Property Week, landlords collected just 18.2% of commercial rents for the June quarter.
Intu began talks with creditors in May but could not reach an agreement on the duration of a standstill, how much creditors would share in any future recovery and funding.
An application is being made for James Robert Tucker, Michael Robert Pink and David John Pike of KPMG to be appointed as joint administrators for the group, Intu said, adding that it was expected to become effective shortly.
With net debt of around £4.69 billion last year, the debt waiver Intu secured in early-May expires today, triggering a breach.
Its London-listed shares had collapsed nearly 70% to a record low of 1.2 pence, valuing the company at around £16m from a peak of £13 billion in 2006.
Intu said listing of its shares in London and Johannesburg has been suspended.
In recent years, Intu has been hit by company voluntary agreements from brands including Debenhams, Toys R Us, House of Fraser and HMV.
Two years ago, its largest shareholder John Whittaker's Peel Group made a £2.9 billion approach for the company and rival mall operator Hammerson offered £3.4 billion to buy Intu.
Analysts said the fact that several suitors took a look at the business in the last couple of years before walking away should have set alarm bells ringing. The chances of a white knight riding to the rescue are practically non-existent at this point, they added.