Key lender urges fast sale of Intu's Trafford Centre
News of Intu’s administration filing has been quickly followed by speculation over whether the firm will be broken up with one report saying a creditor is urging a fast sale of Manchester’s Trafford Centre, Intu’s top asset.
The Canada Pension Plan Investment Board (CPPIB) was reportedly the main creditor that held out against Intu’s hoped-for standstill agreement on its major debts. And the CPPIB wants to sell the Manchester mall.
The Trafford Centre is seen as the firm’s most valuable property and CPPIB now controls what happens to it, with Intu’s complex organisational and borrowing structure meaning that other lenders are now in the driving seat for different parts of the group.
The Sunday Times reported CPPIB’s desire to sell Trafford and also speculated on whether those other lenders would prefer to sell their respective assets quickly or hire asset managers to run the malls. However, if they opted for the latter route, it’s unlikely they would be seeking a long-term commitment and it's assumed they would be holding on in the hope of a recovery for the property sector.
The CPPIB lent Intu £250 million against the key Northern England mall, which was valued at £1.7 billion. The mall also has £690 million worth of mortgage-backed securities secured against it.
The Canadian pension fund is clearly expecting any sale to generate enough to pay the debts. And the newspaper said that one potential bidder could be property tycoon John Whittaker. He was a major Intu investor having sold the Trafford Centre to the firm in an equity deal in 2011.
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