Retail property titan Intu has warned that it is “likely” to breach its covenants next month and is negotiating with lenders to freeze its debts during the coronavirus pandemic.

The Manchester Trafford Centre owner said it expected to breach its debt commitments next month as it would collect minimal rent from its tenants due to mandated store closures amid the coronavirus pandemic.

Intu said that against this backdrop it was unable to pursue other investment options to address its debt shortfall. The property firm said that, as a result, it believed “standstill-based agreements with relevant financial stakeholders across its structures, at both the asset and the group level, are the best course of action and its primary focus to maximise value”.

Intu said the agreements would seek a pause on “financial covenant testing, debt amortisation and facility maturity payments” up until the end of next year, in order to take into account stores opening back up following the pandemic and allowing time for the market and consumer sentiment to stabilise.

The property group said discussions with lenders around these terms were ongoing. The proposal comes shortly after the property firm drafted in restructuring expert David Hargrave in a bid to bring its £4.5bn debt pile under control.

It has been reported that Intu could lose control of key shopping centres if it breaks its covenants next month after bondholders hired law firm Clifford Chance and investment bank Moelis & Company to advise on the £1.3bn debt pile secured against Intu’s centres.