Intu shares surge after cash figures published

Intu shares rose by more than half after the shopping centre operator published figures showing it expected to have more than £62m of cash at the end of 2021.

The struggling real estate company said it expected rents to plunge from £491.6m in 2019 to £310m in 2020. But it predicted its cash position would drop by less than £20m in 18 months from £81.8m at the start of the second half of 2020 to £62.6m at the end of 2021.

The owner of Manchester's Trafford Centre and Lakeside in Essex said it made the cash flow projection available in relation to its bond and debt structures as it negotiates with lenders for a lifeline. Intu said on 18 May it was seeking standstill agreements with creditors and warned it was likely to breach banking covenants at the end of June.

Shares of Intu rose as much as 71% and were up 49.7% to 8.42p at 10:51 BST. Shares of Hammerson, which Intu tried to merge with in 2018, rose 20% to 98.71p.

Traders speculated that short sellers of Intu might be facing a squeeze, forcing them to dump their holdings to avoid further losses. They also pointed to an upbeat statement from Westfield owner Unibail-Rodamco about the reopening of its malls.

Intu was already struggling under a large debt load before the Covid-19 crisis closed all but essential stores at its shopping centres. Many tentants are not paying rents and fears are mounting that retailers will scrap stores or go bust during a deep recession.