TIDM69ZM
RNS Number : 6320Z
Intu Debenture PLC
24 May 2021
24 May 2021
Intu Debenture PLC
Quarterly Report and Amendment and Restructuring Transaction
Update
INTU DEBENTURE PLC
LEI: 213800UX3TM5RGB1UF29
INTU DEBENTURE PLC (THE "COMPANY") ANNOUNCES QUARTERLY REPORT
AND UPDATE ON AMENDMENT AND RESTRUCTURING TRANSACTION
24 May 2021
Quarterly Report
The Company has prepared a quarterly report for the period 1
January 2021 up to and including 31 March 2021 which contains an
operational and liquidity update and is available on the Company's
website at https://debentureplc.com/ (the "Quarterly Report"). The
Quarterly Report notes that, although the Eldon Square Shopping
Centre, the Potteries Shopping Centre and Xsite had only 19%, 4%
and 2% respectively of floorspace open throughout Q1 2021, 42% of
rent and 48% of service charges were collected in the same period,
representing an improvement against forecast levels. The Quarterly
Report also details key tenants (including, for example, Next
Holdings Limited, Boots UK Limited and Odeon Cinemas Limited), a
footfall comparison, a Q1 2021 cashflow statement and Q2 2021
cashflow forecast, amongst other updates.
Liquidity Update
In the Company's Stockholder Update of 22 January 2021
(available on the Company's website at https://debentureplc.com/)
the Company noted that it expected that the cash balances of the
Company and its subsidiaries (the "Debenture Group") would reduce
significantly to virtually nil by the end of March 2021 as a result
of the unwind of a number of material creditors (including energy
and insurance providers) that were deferred post-transition and the
costs of the proposed amendment and restructuring transaction. As
noted in the Quarterly Report, by virtue of a combination of
improved rent, service charge and arrears collection, cost savings
(including temporary deferral of some capital and operational
expenditure), the delay to the restructuring transaction, and other
cash preservation initiatives, at the end of March 2021 the
Debenture Group's aggregate cash balances were GBP12.7 million.
Amendment and Restructuring Transaction Update
As indicated in the Company's Stockholder Update of 22 January
2021, the Company was expecting to release an Extraordinary
Resolution to approve the proposed amendment and restructuring
transaction as detailed in the debt and equity term sheets annexed
to that Stockholder Update. As Stockholders may recall, that
restructuring transaction included an agreement (subject to
Stockholder consent) with the administrators (the "Administrators")
of Intu Properties Plc (in administration, "Intu Properties"),
Liberty International Holdings Limited (in administration, "LIHL")
and Liberty International Treasury Group Limited (in
administration, "LIGTL") to purchase the shareholding of Intu
Properties and LIHL in the Company and settle the GBP247.8 million
outstanding intercompany balance owed to LIGTL. For commercial
reasons, the Administrators requested that the consideration for
the transaction remained confidential. However, it was noted that
the amount was not material in the context of the overall
restructuring of Debenture Group or its liquidity position.
Whilst the intention was to effect the Extraordinary Resolution
in relation to the restructuring transaction during February 2021,
unfortunately the timing of that resolution has been impacted as
indicated in the Company's announcement of 19 March 2021 (available
on the Company's website at https://debentureplc.com/rns/). The
delay has resulted from the Debenture Group being notified by the
Administrators of a number of potential additional intercompany
liabilities (the "Potential Liabilities"). The Administrators have
stated that the Potential Liabilities have been identified as a
result of due diligence undertaken by the Administrators on the
books and records of the wider intu group in relation to Intu
Properties and other subsidiaries including Intu Retail Services
Limited (in administration) and LIGTL. The total claim by the
Administrators in respect of these Potential Liabilities is GBP4.3
million.
Since the Company's announcement of 19 March 2021, the Company
has been engaged in an ongoing dialogue with the Administrators
with respect to the Potential Liabilities. The Debenture Group
disputes the Potential Liabilities and is continuing to evaluate
both the quantum and origin of the alleged additional intercompany
liabilities and it is still to be determined what impact these
liabilities may have on the structure of the proposed amendment and
restructuring transaction. The Debenture Group is committed to
completing the evaluation as soon as possible, however that task is
subject to information flow and engagement from the Administrators
and therefore the timing is uncertain for completion of that
work.
Non-payment of upcoming Scheduled Interest Amount and Scheduled
Redemption Amount in relation to the GBP354,876,000 5.562 per cent.
First Mortgage Debenture Stock due 2027 (the "Stock") issued by the
Company
The evaluation of, and investigations in relation to, the
Potential Liabilities has resulted in a delay to the progress of
the amendment and restructuring transaction and as a result the
Company has been unable to implement the proposed changes to its
current debt service obligations as set out in the Company's
Stockholder Update of 22 January 2021. As noted above and as
detailed further in the Quarterly Report, the Debenture Group had
GBP12.7 million in available cash as at the end of March 2021 as a
result of a combination of improved rent, service charge and
arrears collection, cost savings (including temporary deferral of
some capital and operational expenditure), the delay to the
restructuring transaction, and other cash preservation initiatives.
That capital expenditure and significant operational expenditure
which have been delayed nevertheless must be incurred in order to
continue to operate the business and therefore the limited funds
currently held by the Debenture Group are considered to be
unavailable to make payment of the Scheduled Interest Amount and
the Scheduled Redemption Amount on 30 June 2021.
Accordingly, NOTICE IS HEREBY GIVEN that whilst the Company is
due, pursuant to clause 5 of the Trust Deed and the conditions of
the Stock, to make payment of the Scheduled Interest Amount and the
Scheduled Redemption Amount on 30 June 2021, as noted above, the
Company does not anticipate that it will be able to make payment of
either the Scheduled Interest Amount or the Scheduled Redemption
Amount on 30 June 2021, or within the 14-day grace period for
non-payment set out in Condition 16(i) of the Stock.
The Company will continue to keep holders of the Stock notified
of any relevant developments in accordance with applicable law and
regulation.
Capitalised terms used in this Notice and not otherwise defined
shall have the meanings given to them in the Supplemental Trust
Deed and the trust deed dated 5 October 2006 (as amended and
supplemented from time to time, the "Trust Deed") constituting the
Stock and made between the Company, the Charging Subsidiaries (as
defined in the Trust Deed), and The Law Debenture Trust Corporation
p.l.c., unless the context otherwise requires.
Stockholders should contact the following for further
information:
Company
Simmons & Simmons LLP
Citypoint
1 Ropemaker Street
London
EC2Y 9SS
United Kingdom
Email: intu@simmons-simmons.com
Attention: Peter Manning and James Taylor
Registrar
Link Group
10(th) Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
Telephone: +44 371 664 0300
(Calls are charged at the standard geographic rate and will vary
by provider. Calls outside the United Kingdom will be charged at
the applicable international rate. Open between 09:00 - 17:30,
Monday to Friday excluding public holidays in England and
Wales)
Email: shareholderenquiries@linkgroup.co.uk
Alvarez & Marsal Europe LLP and Milbank LLP have been
retained as financial and legal advisers to an ad hoc group of
Stockholders. Their contact details are as follows:
ProjectIrisAMTeam@alvarezandmarsal.com and Iris@milbank.com.
This announcement is made by Intu Debenture PLC
Dated: 24 May 2021
This announcement is released by Intu Debenture PLC and contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 as it forms part of domestic law by
virtue of the European Union (Withdrawal Act) 2018 ("UK MAR"),
encompassing certain information relating to the valuation of the
Properties described above. For the purposes of UK MAR, this
announcement is made by David Duggins (Director) at Intu Debenture
PLC.
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END
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