Intu circled by buyout firms as it faces £1bn debt crunch

The private equity fund, led by Aref Lahham, is understood to be seeking partners for a buyout of Intu Properties, according to The Sunday Times.

The property group, which operates the Trafford Centre in Manchester and Lakeside in Essex among others, has had its income hammered by CVAs from retailers including Arcadia and Debenhams.

Intu’s rental income nosedived 18% in the six months to June, while the value of its portfolio was slashed 9.6%.

Stifel analysts warned last week that Intu was at risk of breaching covenant on approximately £1.1bn worth of debt as the value of its assets continued to decline, and said in a separate note in August that the rights issue to solve Intu’s debt problem would require “such an enormous contribution from stakeholders, we think it unlikely to succeed”.

Orion Capital Managers first snapped up a stake in the property group in January and today holds a 9.2% share, meaning the private equity firm would need to work with John Whittaker’s Peel Holdings, which has 27.3%, Olayan Group, which has a stake in Peel, and at least one other party to orchestrate a successful buyout.

Peel, Olayan and Brookfield unsuccessfully tried to take Intu private last year, and the retailer’s proposed merger with rival Hammerson also collapsed.