Embattled retail landlord Intu has said it is ‘likely’ to appoint administrators as negotiations with its lenders stall.

The retail landlord had aimed to reach a standstill agreement with its creditors, which would have paused financial covenant testing, debt amortisation and credit facility maturity payments up until the end of next year.

Intu’s revolving credit facility is due to expire today and the retail landlord has said that “insufficient alignment and agreement has been achieved” with its lenders for the property firm not to breach its covenants.

Intu, which put KPMG on standby in the event that its financing talks failed, said it is “considering the position of Intu with a view to protecting the interests of its stakeholders” and that process “is likely to involve the appointment of administrators”.

Sources close to the situation had told Retail Week that although lenders were unlikely to agree to a debt standstill, other solvent restructuring arrangements such as a debt for equity swap may have been an option. However, an agreement that does not involve administration now seems unlikely.

Intu said earlier this week that, should it fall into administration, there was a risk that some of its 14 shopping centres – including Lakeside in Essex, Trafford Centre in Manchester and the Metrocentre in Newcastle – would close.

As discussions with lenders have ground on, Intu was badly affected by one of the lowest quarter rent days in history yesterday. Across retail property it is thought that only between 10% and 15% of all rent due was collected by landlords.

As the coronavirus lockdown forced stores to close for months, many retailers refused or were unable to pay at the previous quarterly rent day in March.

While non-essential retailers were allowed to reopen from June 15 in England, and a week later in Wales, many retailers are still reeling from lost sales and diminished customer demand as some lockdown measures continue to grind on.

Retailers such as Boots, Primark and JD Sports have all refused to pay another quarter of rents. Other troubled retailers such as Debenhams, an anchor for many shopping centres, have either renegotiated rents to monthly payments or closed stores where such terms could not be agreed.

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