Milton Keynes shopping centre facing insolvency as debts mount during pandemic

Intu shopping centre in Milton Keynes could begin an insolvency process by the end of the month as debts have worsened during the Covid-19 crisis, it has been revealed.
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The shopping giants, who also owns the Trafford Centre and Lakeside, have put administrators on standby, Sky News has reported.

All the centres are said to be in jeopardy unless the company can strike a deal with lenders over the next couple of weeks.

Intu Properties is at a critical phase in negotiations and has lined up KPMG to act as administrators if the talks fail, says Sky News.

intu MKintu MK
intu MK

It is said to be asking for an 18 month 'standstill' that would freeze interest and debt repayments. Some intu sources say there is a still a chance banks would agree to bail the company out, but if it fails, it is highly likely intu would collapse into administration.

The company, which directly employs more than 2,000 people, was struggling with a £4.5billion debt mountain even before the coronavirus pandemic struck.

In early March, chief executive Matthew Roberts revealed 40 per cent of of the stores in intu centres were suffering money problems and trading on reduced rent - read full story here.Second quarter rents are now due in the last week of June, and it is likely that intu's debts will escalate as many of the shuttered stores will struggle to pay.

Since lockdown, all intu centres have been closed apart from essential banks, food stores and pharmacies. In MK, the only places allowed to be open were the three banks, Barclays, HSBC and Santander.

intu MKintu MK
intu MK

Its largest store, Debenhams, entered into administration last year and closed 19 outlets in January, while drawing up a list of 28 more due to close in the future.

This week Debenhams announced it would start reopening the majority of stores from June 15 - but the intu Milton Keynes store was not on the list - read full story here.

Meanwhile hospitality industry leaders led by and the trade body UK Hospitality are petitioning Chancellor of the Exchequer Rishi Sunak for a 12-month rent deal for cafes, restaurants and bars.

They predict a third of the hospitality industry could collapse, affecting a million jobs nationwide.