Property giant Intu shares jump as it confirms 'discussions' over cash call

JSE-listed British real estate investment trust Intu Properties, which owns mall properties in the UK and Spain, confirmed on Monday that it is in talks with investors to get cash to achieve its top  priority: fixing its balance sheet.  

The cash-strapped mall owner said in a statement released on Monday that it was in "constructive" discussion with both shareholders - including the Peel Group and others - and new investors, including Link Real Estate Investment Trust, "in relation to a proposed equity raise alongside [its] full year results at the end of February".

The company previously has been struggling with debt that runs into billions of rands, which was partly caused by failure to pay rent by some of its major occupants such as UK based retailers Debenhams and Arcadia. 

As Intu announced in November last year, its “number one” priority was to fix its balance sheet, which was burdened with a net debt of R88.6bn, a portion of which was caused by failure to pay rent by some of its major tenants such as Debenhams and Arcadia. It has previously said it would be selling some of its assets and that it was planning an equity raise.

Intu announced last month that it disposed of one of its largest shopping centers in Spain - the Intu Puerto Venecia in Zaragoza – for €475.3m (R7.8 bn).

Although Intu confirmed that it was in talks, it added, however, that "there can be no certainty that the equity raise will be implemented".

At 17:00 on Monday, Intu [JSE:ITU] shares were trading at R3.20, 24% up. A year ago, Intu shares were changing hands at R21.05 apiece. 

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