Brexiteer Crispin Odey makes £75m by betting against failed shopping mall owner Intu
- Odey had held a short position in Intu since at least 2012
- Intu collapsed after it was unable to persuade its lenders to grant a debt repayment holiday
One of Britain’s top hedge fund managers has made at least £75million from the demise of the owner of the Trafford Centre shopping mall.
Crispin Odey, a prominent Brexit backer, had held a short position in Intu since at least 2012.
Intu collapsed into administration on Friday after it was unable to persuade its lenders to grant a debt repayment holiday.
Hungry: Short-sellers such as Crispin Odey make money when shares fall, so the collapse gave him a huge windfall
Short-sellers such as Odey make money when shares fall, so the collapse gave him a huge windfall.
Odey made his name as one of Britain’s top hedge fund managers when he bet against banks ahead of the financial crisis in 2008.
His multi-million-pound profit on Intu comes as short-sellers, such as Sir Chris Hohn’s The Children’s Investment Fund, reap huge gains from the collapse of a variety of businesses, such as German online payment group Wirecard.
Short-sellers make money by borrowing shares and selling them in the hope of buying them back at a discounted price. They then return the shares to the original owner, pocketing the difference.
Toscafund, which is run by Martin Hughes, is also likely to have made a significant amount from the implosion of Intu after taking a bet against the company in January.
Intu directly employs almost 3,000 people in the UK and runs 17 shopping malls, including Lakeside in Essex. The total number employed at its centres exceeds 100,000.
It owed around £4.5billion to its lenders. Its administrators KPMG said Intu’s shopping centres were owned individually by special purpose vehicles which were outside of the insolvency process and thus able to trade as normal under the control of their directors.
The company’s creditors have agreed to stump up £12million to keep the centres open as the administration process takes place.
It is likely the creditors will keep the businesses trading until buyers can be found for individual centres, probably for significant losses to their former valuations.
Its tenants, many of whom failed to pay rent for the past two quarters amid the Covid-19 crisis, include the likes of Marks & Spencer, Debenhams, Next and H&M.
Intu received only 29 per cent of payments due on the March 25 quarterly rent day.
UK retailers are estimated to have paid just 14 per cent of the £2.5billion quarterly rent due last week as they try to conserve cash and negotiate new deals.
Intu has been under pressure for several years as the value of its centres – and those of rival operators such as Hammerson – declined because its retailers, including Debenhams, Topshop and House of Fraser, closed stores and demanded rent cuts so they could stay afloat.
Intu was once a constituent of the FTSE100. Its shares plunged on Friday by 55 per cent to close at 1.8p. A year ago it was trading at 75p. The shares have now been suspended.
David Pike, partner at KPMG and joint administrator, said: ‘With all centres remaining open, we look forward to working with staff, suppliers and other key stakeholders to preserve value and jobs in these important retail destinations.’