Merry Hill owner Intu warns it could go bust as losses hit £2 billion
Merry Hill owners intu warned it could go bust if it cannot raise further funds as it slumped to a £2 billion annual loss.
Intu saw losses widen from £1.2 billion in 2018 and was forced to write down the value of its shopping centre sites and properties by £1.9 billion after recent retail sector woes.
Intu took complete ownership of the centre in June 2016 after buying out Australian investment group QIC in a £410m deal for its 50 per cent stake.
At that time the Merry Hill was worth around £890m. But the market value of the Brierley Hill shopping centre has now dropped to £587.6m.
It comes as Merry Hill is in the middle of a £12m revamp which includes new cladding surrounding the Debenhams entrance.
The firm still has £10m of work to do with the project is scheduled to complete later this year.
Chief executive Matthew Roberts said: "In the short term, fixing the balance sheet is our top priority.
"We have options including alternative capital structures and further disposals to provide liquidity, and will seek to negotiate covenant waivers where appropriate," he said.
He added: "We are focusing all our energies on moving the business forward."
Intu pulled its planned cash call last week, blaming market uncertainty, saying investors were put off by volatility in equity markets and the retail property investment market.
It came as a major blow for the group, which had hoped the funds could help reduce the firm's £4.5 billion debt mountain.
The firm's full-year results showed like-for-like rental income tumbled by 9.1 per cent in 2019 - half of which was caused by the surge in retail rescue deals and administrations.
Lats year saw soaring levels of retail company voluntary arrangements, with many struggling chains demanding lower rents and shutting stores to survive.
The coronavirus outbreak threatens to add to the group's troubles, but it said footfall had so far remained broadly unchanged in the first 10 weeks of 2020.
It is "monitoring" the coronavirus crisis and potential impact on its sites if shoppers are forced to stay away.
It saw a drop in the numbers of shoppers visiting its UK sites, with so-called footfall down 0.1% in Britain, though it edged 0.3% higher overall.
Intu added it expects UK retail valuations to sink further in 2020, but is expecting this to start stabilising soon, while it hopes for a slowdown in like-for-like net rental income de
The group also owns nine of the UK's top 20 shopping centres also including the Trafford Centre and Arndale in Manchester, Lakeside in Essex and Metrocentre in Newcastle-upon-Tyne.
