AlixPartners leads SGS (owner of four of the UK’s leading regional shopping centres and leisure destinations) in successfully completing its landmark recapitalisation

18 April 2024

LONDON (April 18, 2024) – Over the past four years, AlixPartners has led SGS, owner of four of the UK’s leading regional shopping and leisure destinations, through a landmark financial and operational turnaround. This work recently culminated in the successful completion of the largest shopping centre refinancing since 2019, providing SGS with a strong financial footing as it continues to deliver against its business objectives.

SGS owns and manages Lakeside, Atria Watford, Victora Centre (Nottingham) and Braehead (Glasgow) – now valued at £858m - and was previously a sub-group of intu Properties PLC (intu).

Andrea Trozzi, Partner and Managing Director at AlixPartners, was appointed Chief Restructuring Officer and Executive Chairman to the SGS boards, following intu’s administration in 2020. In 2020, SGS had debt totalling c.£1.3bn and an LTV of approximately 175%. AlixPartners led SGS through the separation from intu and the successful financial restructuring achieved in 2021, all whilst navigating the challenges faced by the retail and real estate sectors as a result of the COVID-19 pandemic. The 2021 restructuring included extending the maturities of debt facilities totalling c.£600m to 2024 and the provision of a new £87m super senior money facility.

From 2020 AlixPartners worked with Global Mutual (Asset Manager), Savills (Property Manager) and the SGS Finance team to drive the operational turnaround of SGS which has led to significant growth in key metrics such as occupancy (now at 93%), rental income (an increase of over 20%), collections (now at 97%) and footfall, where SGS has consistently outperformed other comparable shopping centres. These improvements have ultimately resulted in an increase in asset values since December 2020 of over 20%, significantly outperforming other comparable shopping centres.

More recently, AlixPartners worked with SGS and its advisers to develop and deliver a plan to further optimise SGS’s capital structure through a recapitalisation which concluded on 17 April 2024 and received overwhelming support from lenders (100% of those that voted). The recapitalisation included SGS raising £445m of new senior debt facilities with Lloyds, which represents the largest UK shopping centre financing since 2019, and £444m being returned to lenders, including full repayment of the existing super senior money facility.

Following the conclusion of the recapitalisation and operational turnaround, SGS has senior debt facilities of £445m resulting in an LTV of c45%. This will provide a stable platform from which the company can deliver further growth and value to investors going forward.

The AlixPartners team was led by Andrea Trozzi and included Chris Elkins, Sam Guttmann-Hancocks, Seppi Grant, Carl-Gustav Beckmann, Paul Carruthers, Michael Leonard, Stefnir Steffnisson and Neel Malde. AlixPartners worked closely with the other members of the SGS Board (Jeremy Jensen and Neil Robson), the SGS Finance Team (Gareth Evans, CFO and Richard Draycott, Financial Controller), Global Mutual as Asset Manager, Savills as Property Manager, Linklaters, Rothschild & Co and PwC as advisers to SGS, and Moelis and Kirkland & Ellis as advisers to the steering committee of SGS’ lenders through the recapitalisation process.

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