Intu slumps 71% after saying administration is likely

The share price of UK mall owner Intu Properties slumped 71% to a record low in morning trade on Friday, after it said it was likely to enter administration due to a failure to reach agreement with lenders.

The group, which was formed out of the late billionaire Donald Gordon’s Liberty International 10 years ago, has struggled to survive a changing retail landscape where e-commerce is increasingly competing with high street retail.

It has been struggling with debt of about R100bn, which compares unfavourably with its market capitalisation of R1.42bn on Friday morning.

The group needed to reach a new debt agreement with lenders by the end of Friday, but says so far this has not happened.

“The board is therefore considering the position of Intu with a view to protecting the interests of its stakeholders,” the group said.

“This is likely to involve the appointment of administrators,” Intu said, adding that it would make further updates in due course.

More than 20% of Intu is owned by SA institutions and individuals. Coronation Fund Managers is Intu’s second-biggest shareholder after the Peel Group, with about 10% of the company. Investec owns about 6% of the stock and the Gordon family still retains a 6% shareholding.

In morning trade on Friday, Intu’s share price was down 71% to 27c, putting it on track for its worst performance since listing, according to Infront data.

The group’s share price has fallen 99% over the past two years.

With Alistair Anderson