Hong Kong's Link pulls out of Intu fundraising talks

Intu Properties shares plunged after a big potential investor pulled out of talks to provide fresh funds, throwing the shopping centre operator's survival plans into doubt.

Hong Kong's Link Real Estate Investment Trust has decided not to take part in Intu's fundraising, the owner of Manchester's Trafford Centre said. Intu said it was talking to other shareholders and potential new investors about raising fresh equity.

Intu shares fell 30% to 12.13p at 1225 GMT.

Intu said on Monday that it was in constructive talks with Link about participating in a fundraising expected to be valued at at least £1bn, to be announced in February. Link's withdrawal is a blow to the company's plans to secure funding.

"Further to yesterday's announcement, Link Real Estate Investment Trust has informed Intu of its intention to no longer participate in a recapitalisation of the company," Intu said.

The company is burdened with £4.7bn of debt as its retail tenants close stores while consumers are frugal and shift shopping online. Investors have become increasingly wary of retail property owners because of worries about collapsing real estate values.

Some of Intu's biggest customers such as Debenhams and Topshop owner Arcadia have undergone emergency surgery, leading to store closures and requests for lower rents.