Property group Hammerson, which owns shopping centres including the Bullring in Birmingham and Brent Cross in north London, is drawing up plans for a possible rights issue and is in advanced talks on the sale of its stake in a discount shopping outlets joint venture to help it through the coronavirus crisis.
Hammerson shares, which have plunged 80% this year as the retail landscape has been battered by coronavirus lockdowns, closed down nearly 5% at 61p after the latest update on its financial struggles.
The health crisis has brought mall operators to their knees as their already struggling tenants have been squeezed even further by stay-at-home shoppers, prompting calls for rent relief and deferrals.
UK retail landlords squeezed as stores hit by Covid-19 crisis
Hammerson had net debt of £2.8bn pounds at the end of 2019, exceeding a market capitalisation of about £2.4bn at the time.
Rival group Intu Properties, which Hammerson attempted to buy two years ago, was forced to bring in administrators in June after it failed to secure a deal with creditors as the sector outlook worsened.
Hammerson said it plans to sell its 50% stake in VIA Outlets to Dutch pension fund APG, its partner in the venture created in 2014 to acquire shopping outlet centres across Europe.
Sky News, which first reported the proposed capital increase and disposal, said Hammerson intends to raise £800m.
Hammerson did not disclose further detail on the proposed rights issue or the stake sale and declined to comment when asked by Reuters how much it plans to raise.
“We think raising about £1.3bn is more like the quantum needed to restore the balance sheet to a more comfortable level,” Liberum analysts said in a note.
In its statement on Monday, Hammerson pointed to improving sales and mall visits after it reopened its flagship destinations across Europe and reported a 30% increase in third-quarter rent collection.
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