Troubled retail property group Intu has lined up administrators in case talks with creditors fail.

Intu, which owns shopping destinations such as Lakeside and the Metrocentre, is in negotiations to reach a standstill agreement with creditors as it reels from the impact of the retail downturn.

While there is hope that the talks will bear fruit, with a deadline this Friday, Intu cautioned: “Notwithstanding the progress made with lenders, Intu has also appointed KPMG to contingency plan for administration.”

”In the event that Intu Properties PLC is unable to reach a standstill, it is likely it and certain other central entities will fall into administration. In this situation, all property companies would be required to pre-fund the administrator to provide central services to the shopping centres.

“If the administrator is not pre-funded then there is a risk that centres may have to close for a period.”

Intu reported that a variety of matters are still under discussion, including the duration of the standstill. Some stakeholders want it to last less than 18 months. Intu said: “It is not expected that the duration will exceed 15 months.”

The extent and basis on which creditors at ”individual asset level” will share ”in any future valuation recovery” is also still being negotiated, along with ”how the operations of individual centres are to be funded”.

Intu said: ”Some centres have reduced rent collections as a result of Covid-19 and cash trapped under their financing arrangements which restrict their ability to pay for support (such as shopping centre staff) from other entities in the Intu group.

“Securing additional funding in centres funded by bond structures is more difficult to achieve and, in this connection, consent will be sought shortly from the stockholders of Intu Debenture PLC to authorise the trustee to release certain monies within the existing debt structure to be used for short term liquidity needs. Other centres may also require cash injections for these purposes.”