Intu is on its way to becoming a penny stock, according to analysts at Citi.
Intu is understood to be seeking £1bn to shore up its balance sheet when it announced full results at the end of February. But Aaron Guy, a real estate analyst at Citi, believes that it will end up asking investors for more than £3bn, or 12 times the company’s current market capitalisation.
He argues that the move would allow Intu to invest in better assets which would allow it to sort out its problems in the long term.
Intu’s shares are currently trading for 17.75p, whereas a year ago they were worth over £1.
Citi has added that Hammerson could be in trouble, stating that it needs to scrap its dividend, sell £1bn of assets and raise £1bn of fresh equity if it wants to avoid Intu’s fate.
