Intu property

[dash1]

Hi guys. Does anyone have an opinion of the stock? Looks like a good buying opportunity but, wanted to get your thoughts.

[wjw22]

I spread bet against intu shortly before the most recent takeover talk collapse and I'm very happy.

Shopping centres in the UK are in trouble and intu has further to fall, unless it is able to offload its mediocre assets to some local authorities.

[phillo]

100p is always a "tough level to crack" , but I guess the way retail is in the UK at the moment, this one doesn't look great at the moment. Trend is your friend & this one is definitely down !

[wjw22]

On 05/01/2019 at 22:06, wjw22 said:

Shopping centres in the UK are in trouble and intu has further to fall, unless it is able to offload its mediocre assets to some local authorities.

And so it came to pass...

https://www.bbc.co.uk/news/topics/cm1ygzmd3rqt/intu-properties

[phillo]

On ‎06‎/‎01‎/‎2019 at 15:55, elle said:

100p is always a "tough level to crack" , but I guess the way retail is in the UK at the moment, this one doesn't look great at the moment. Trend is your friend & this one is definitely down !

 

[wjw22]

intu has an announcement today regarding its rights issue.

intu announces Amendment of Revolving Credit Facility

Quote

intu is pleased to announce that it has agreed terms for an amendment and extension of its revolving credit facility ('RCF') to 2024. The revised four-year, £440 million RCF is conditional on intu raising a minimum of £1.3 billion of equity and will replace intu's existing £600 million RCF that is due to expire in October 2021.

The revised RCF will be provided by all seven of the existing banks who participate in intu's current RCF, being Bank of America, Barclays, Credit Suisse, HSBC, Lloyds, Natwest and UBS.

The Company is working with its corporate brokers, BofA Securities and UBS, and its financial adviser, Rothschild & Co, on the intended equity raise and intends to update the market in this regard at the time of release of its Annual Results for the year ended 31 December 2019, on 5 March 2020.

Matthew Roberts, chief executive of intu, commented:

"This extension of our RCF is a key milestone in addressing our near-term refinancing needs. It also underlines the continued support we have from our relationship banks. This revised RCF will extend the maturity profile and be used to provide general liquidity for intu.

Fixing the balance sheet remains our number one priority and we remain engaged with shareholders and potential new investors in relation to the intended equity raise."

intu has a market capitalisation of 220m.  Its chances of raising 1.3bn seem remote.  I'm short again.

[wjw22]

Intu receives mention in today’s FT Alphaville (registration but not subscription required).

From intu's update on strategy to fix the balance sheet:

Quote

intu has, over the past several months, engaged in extensive discussions with its shareholders and potential new investors regarding a possible equity raise of between £1 billion and £1.5 billion. Following these discussions intu has concluded it is unable to proceed with an equity raise at this point.

While a number of intu's shareholders and potential new investors indicated their support for an equity raise, the Board believes the current uncertainty in the equity markets and retail property investment markets precluded a number of potential investors from committing capital into the business and intu was therefore unable to reach the target quantum at the current time.

However, during this process, intu received several expressions of interest to explore alternative capital structures and asset disposals.

Accordingly, intu will continue and broaden its conversations with its stakeholders with a view to discussing the range of options available to the Company to demonstrate the equity value of the business and to utilise its assets to provide further liquidity. These include alternative capital structures and solutions and further disposals.

The only "alternative capital structures" I can think of involve giving creditors more control than current shareholders.  Intu's going to keep selling off what assets it can.  Effectively it is doing what would happen if it went into administration.

[wjw22]

Intu appears to have unknown availability of borrowing for short selling on IG.  Does that imply an increased risk of a short squeeze?