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Friday update

DB Live: Intu ‘collapses into administration’

4.45pm: London close

The London market remained in positive territory throughout the session but came off its intra-day high of 6262 to close at 6,159.30 +12.16 (0.20%).

The US market opened lower, with stocks taking a hit from the Federal Reserve’s latest bank stress-test results and a new record number of daily coronavirus cases in the United States.

3.30pm: Intu in administration

Intu Braehead

UK shopping centre owner Intu is understood to have collapsed into administration after negotiations with its lenders failed ahead of the midnight debt covenant deadline.

The company owns and operates 17 shopping centres across the UK including the Braehead shopping centre on the outskirts of Glasgow, and its failure comes just days before the lockdown is lifted on retail in Scotland.

It directly employs circa 2,373 people, including 370 at its head office in London, and each year welcomes around 400 million visitors to its sites.

KPMG the newly appointed administrator said the centres will remain open, which means that for most consumers there will be little visible difference.

However, there is uncertainty for the tens of thousands employees who work for one of Intu’s many tenants.

Dr Gordon Fletcher, of the University of Salford Business School, said: “Intu’s fall into administration will probably be remembered as the biggest corporate failure of the pandemic lockdown. However with nearly £5bn of debt and no more lifelines from its creditors Intu’s predicament predates COVID-19.

“As one of the biggest landlords for so many retailers that were forced to shut during the lockdown the end of this property company was rapidly accelerated. Incomes from rentals contracted and the business model is primarily based on this single source.

“The model for all shopping centres has changed little since the 1960s but consumers have. The consumer desire for experiences override the utilitarian functionality of this model and will need to be a consideration for any prospective buyer for Intu’s many large properties.”

3pm: Aston Martin funding

Aston Martin DB11

Aston Martin Lagonda has raised £152 million from its placing and retail offer of 304 million shares at 50p per share, an 8.1% discount to the market price when the placing was agreed.

Earlier, the luxury carmaker announced plans to sell new shares totalling up to 19.99% of its current issued share capital in an attempt to secure enough cash to “successfully emerge from the extended Covid-19 lock-down”.

Aston Martin’s shares were down 16% at 52.17p compared to a 175.80p share price at the start of the year.

2.15pm: Tesco revolt

More than two thirds of Tesco shareholders voted down the grocery giant’s pay report at its annual meeting.

It came after the group announced a positive first quarter update.

Edinburgh-based Tesco Bank saw income fall sharply.

Full story here

10am: More SPFL support

The SPFL Trust has secured a further £1.25m commitment, this time from an associate of wealthy fund manager James Anderson who has already donated more than £3m to support clubs.

Full story here

9am: Vattenfall wind farm plans

Vattenfall wind farm

Renewables company Vattenfall is unveiling proposals for further investment in South West Scotland following its multi-million-pound contract for the construction of South Kyle Wind Farm.

It is now exploring the potential for two wind farms in the region along with a battery energy storage facility at each location.

The Whiteneuk Wind Farm project, comprising 35 turbines, is about just south of Moniaive. Quantans Hill Wind Farm project, north-east of Carsphairn village, will consist of up to 21 urbines.  Each turbine could have a blade tip height of up to 250m.

8.30am: London open

The FTSE 100 was trading at 6,206.02 +58.88 (0.96%)

7am: Menzies CEO leaving

Further boardroom upheaval at the logistics group as chief executive Giles Wilson, is leaving to become Chief Financial Officer at William Grant & Sons.

Full story here

Intu for administration

Shopping centre group Intu, owner of the Braehead and Trafford malls, says the appointment of administrators now looks “likely”after the failure of talks with lenders.

In a statement ahead of a midnight deadline tonight the company said: “Discussions have continued with the Intu Group’s creditors in relation to the terms of standstill-based agreements. Unfortunately, insufficient alignment and agreement has been achieved on such terms.

“The board is therefore considering the position of intu with a view to protecting the interests of its stakeholders. This is likely to involve the appointment of administrators.”

Marston’s warns

Brewing group Marston’s said it was uncertain about its financial outlook in the short-term as it prepares to reopen pubs and restaurants next month, following a £40 million hit to sales from the coronavirus lockdown.

The Midlands-based company, which is set to combine its brewing business with Carlsberg UK, posted an underlying pretax profit of £9.4m for the six months ended 28 March, compared to £34.2m last year.

Marston’s brews Glasgow-owned Gen!us lager at its Eagle Brewery in Bedfordshire.

Tesco

Tesco

Online sales rocketed in the first quarter as consumers coped with the lockdown.

A 90% surge in May contributed to a 48.5% rise over the 13 weeks to the end of May.

Aston Martin wants more funding

Aston Martin Lagonda said it plans to sell new shares totalling up to 19.99% of its current issued share capital in an attempt to secure enough cash to “successfully emerge from the extended Covid-19 lock-down”.

The price at which the shares are to be sold will be determined at the close of the bookbuilding process, the luxury carmaker said

Boohoo incentives

Online clothing business Boohoo is to implement a new management incentive plan that will be share price focused to align interests of management with existing and potential shareholders and will be a three-year scheme.

Weir financing

Weir Group has completed the refinancing of its main banking facilities with a syndicate of 12 global banks.

The company said it continues to be highly cash generative

6am: Markets

London is set for a positive start after US markets recovered from a soft start yesterday to finish in positive territory.

Spread betters suggest the FTSE 100, which rose 23 points to close at 6,147 yesterday, will open around 69 points higher at 6,216.

The Dow Jones reversed early losses to close 300 points higher while the S&P 500 added 33 points to finish at 3,084.

Equities in Japan have followed the trend this morning but not so share in Hong Kong. Tokyo’s Nikkei 225 was 275 points better but Hong Kong’s Hang Seng was 110 points weaker.

Today’s agenda

* Tesco’s board is facing a shareholder revolt at the annual general meeting over the pay packet of soon-to-depart chief executive Dave Lewis. 

* Intu, owner of the Braehead and Trafford shopping centre, faces a deadline with lenders to avoid administration



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