SGS completes £445m shopping centre recapitalisation

SGS Group, which owns four former intu shopping centres, has closed a major recapitalisation that includes £445m of senior financing from Lloyds Bank. The deal marks the largest shopping centre refinancing in five years. The refinancing for the portfolio, which comprises the Lakeside Shopping Centre in Thurrock, Atria Watford in Hertfordshire (pictured), and centres in Nottingham and Braehead, consisted of a £395m senior term loan and a £50m capex facility. The loan, which has an initial maturity in 2028 and can be extended by up to a year, has been used alongside available cash to repay £444m to existing creditors. The remaining  £1.3bn of SGS debt that has not been repaid from the transaction has been exchanged into equity or equity-like equivalents within the structure. As part of the deal, a new board has been appointed, led by former Unibail-Rodamco-Westfield group chief financial officer Jaap Tonckens as non-executive chairman. Peter Williams, Jon Lurie and Anders Hemmingsen are non-executive board members. The transaction gained unanimous support from its creditors. SGS said the recapitalisation marks a shift to institutional standard governance and management for the group, which is designed to follow a typical real estate privately owned structure. The group separated from intu Properties when the landlord entered into administration in 2020, appointing AlixPartners in an executive management and board role, Global Mutual as asset manager and Savills as property manager. Andrea Trozzi, outgoing SGS executive chairman, said: “The completion of this landmark deal marks a major achievement for SGS and a vote of confidence by Lloyds Bank. This is the largest UK shopping centre refinancing in the past five years and means the group’s long-term capital structure is now secured, backed by a supportive investor group and a solid financial and operational performance across all four assets. “SGS is now well-placed to continue delivering on its business plan, with further investment and value-driving asset management initiatives planned, as tenants focus their resources on regionally dominant destinations such as these – that deliver the best performance.” Tonckens said: “These leading retail and leisure assets have gone from strength to strength since separating from intu four years ago due to the excellent work of Alix Partners, the outgoing board members, Global Mutal and Savills. The overwhelming support for the recapitalisation reflects this very strong performance and investor confidence in prime shopping centres.” Raj Jayaprakash, Lloyds Bank, director, global investors and listed clients, said: “We’re pleased to support SGS with optimising its capital structure. Its provision of critical retail infrastructure and jobs, contribution to placemaking and the broader local economies that it operates in aligns with Lloyds Bank’s commitment to regional regeneration. We look forward to continuing to support the company’s positive contribution to these communities.” Image from AL Marketing