The company behind four former intu shopping centres is seeking further waivers from creditors over its borrowings.
SGS Finance, which manages the Lakeside centre in Essex, Watford’s shopping centre, Nottingham’s Victoria Centre and the Braehead Shopping Centre near Glasgow, has launched a fourth “consent solicitation” to bondholders and banks.
The company wants creditor support to waive certain financial covenants, as well as granting forbearance on a term loan repayment and deferring interest payments on payment-in-kind borrowing by two months to mid-May.
SGS said the moves are necessary to ensure the company “retains a stable financial structure and has sufficient liquidity to deal with the ongoing challenges resulting from Covid-19, ahead of implementing its longer term financial restructuring”.
A vote on the proposals will take place on 16 March. SGS will need unanimous approval from term loan lenders and votes in favour by at least 75% of each of its three series of bonds. Bond holders and banks representing some 72% of qualifying debt have indicated that they will vote in favour.
Lending secured against SGS comprises £1.15bn in bonds due across three tranches between 2028 and 2035, as well as a loan of £142m due this year.
SGS said in a stock exchange notice that asset manager Global Mutual and property manager Savills have made “significant progress” in improving rent collection, securing anchor tenants and boosting footfall since the centres were taken over from intu last year.
Steve Gray, head of European retail asset management at Global Mutual, said: “Although we continue to face significant headwinds resulting from the ongoing Covid-related restrictions, I am greatly encouraged by the success of the Global Mutual and Savills teams against our strategic objectives, which includes the signing of a number of exciting new leases with high-quality tenants.
“This strong operational performance, together with the stable financial platform we have thanks to the ongoing support of our lending group, gives us further confidence in the longer-term prospects of our shopping centres.”
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