Sunday 9 February 2020 10:29 pm

Link REIT set to back Intu's £1bn emergency cash call

Hong Kong’s Link Real Estate Investment Trust is reportedly in talks with retail landlord Intu to back its £1bn emergency cash call.

The property giant is nearing a deal with the Trafford Centre owner about becoming a “cornerstone” investor in the fundraise later this month, The Times reported.

Read more: Intu sells Spanish shopping centre for £245m to pay off debt

Peel Group, which owns a 27.3 per cent stake in Intu, is also expected to support the cash call, which will be launched alongside Intu’s full-year results.

However, private equity firm Orion is reportedly unlikely to back the fundraising effort. The Intu shareholder is in talks with shopping centre rival Hammerson to buy seven retail parks. 

In November Intu said fixing its balance sheet is its “number one priority”. 

“We continue to consider all options to put us in the best position to deal with both our short and medium term liquidity requirements as we approach our next material debt maturity in early 2021,” the company said.

“These options include disposing of assets, where we are in the advanced stages of selling two of our Spanish assets, through to raising equity, which is also likely to form part of the solution.”

In the November trading update Intu also warned that it expected to report a sharp drop in rental income for 2019 following a higher-than-anticipated volume of insolvencies from its occuments. 

The retail landlord said that it was forecasting like-for-like net rental income for 2019 to be down by roughly nine per cent compared to last year, with more than half the reduction coming from the impact of controversial cost-cutting insolvencies known as company voluntary arrangements (CVA).