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Bullring owner Hammerson scrambles to raise cash

The group is in talks to sell off European business VIA Outlets.

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The Bullring and other shopping centres were nearly deserted during the lockdown (Jacob King/PA)

The Bullring and other shopping centres were nearly deserted during the lockdown (Jacob King/PA)

The Bullring and other shopping centres were nearly deserted during the lockdown (Jacob King/PA)

Shopping centre landlord Hammerson is trying to raise extra cash by selling its stake in a European arm of the business, and could go cap-in-hand to shareholders.

The business, which has suffered from unpaid rents during the coronavirus pandemic, confirmed press reports from over the weekend that it was in talks to sell its share of VIA Outlets.

The talks are with APG, a Dutch pension fund which is already Hammerson’s partner in VIA.

On Saturday Sky News reported that the deal could fetch as much as £800 million for the troubled business.

“The company confirms that it is in advanced discussions on the terms of a possible disposal of its 50% interest in VIA Outlets to its joint venture partner APG,” Hammerson said in a statement to investors.

The business also confirmed reports that it might go to shareholders for extra cash.

It said that it is “considering a possible equity raise by way of a rights issue”.

Analysts at Liberum said that the potentially “imminent” rights issue could be between around £500 million and £600 million.

Together with the sale of VIA Outlets it could take off some of the pressure, but is not a magic bullet, they warned.

“Successful execution would remove a near-term covenant headache, but not solve the longer-term problem, in our view,” the analysts said.

They added: “We think raising c. £1.3 billion is more like the quantum needed to restore the balance sheet to a more comfortable level.

“We question investors’ appetite for this transaction in the current market.”

Hammerson’s rent collectors have managed to gather around a third of the money they are owed for the third quarter of the year.

Although this is around twice what they collected for the second quarter, it is still a blow to the business.

The Bank of England has promised that Hammerson can access loans of up to £300 million under the Covid Corporate Finance Facility (CCFF).

In June Intu, which owns the Trafford Centre in Manchester and the Metrocentre in Gateshead, fell into administration after talks with lenders failed.

The business was £4.5 billion in debt.

PA