NCP parking operator seeks to cut rents to survive
The UK’s largest parking lot operator NCP has taken legal action to help it cut rents and break contracts for unprofitable parking lots.
The NCP claims to have been “deeply affected” by the Covid pandemic, which has seen its income drop by 80%.
Its Japanese owner Park24 told the company it would withdraw the funding if the NCP restructuring fails.
The NCP said the court process was a “last resort” to protect the future of its business and 1,000 employees.
The firm said it had tried to strike deals with landlords to reduce the rent burden on the 500 sites it operates. A withdrawal of financing from its owner could lead NCP to become insolvent.
“The NCP has been deeply affected since last year as a result of the pandemic – sales during full lockdowns have typically been around 80% below normal levels; outside of the lockdown, they have not increased over time. – over about 50% for any length of time, ”the company said.
He added that the pandemic had “rapidly accelerated the pace of societal change,” citing a combination of increased flexible working, traffic control measures and rapid growth in online shopping as reasons why fewer people were visiting stores. towns and city centers.
“This is not a short-term problem – many main streets and stations are unlikely to regain their pre-pandemic footfall,” NCP said.
The British Retail Consortium estimates that non-essential retail stores lost around £ 22 billion in sales in 2020 due to foreclosure measures, as footfall fell by 40%.
However, after the lockdown restrictions on non-essential stores were lifted on April 12, footfall to all UK shopping destinations increased 87.8% week-on-week, according to analyst Springboard, as consumers decided to indulge themselves after months of not being able to shop.
NCP said it had tried to make deals with its landlords to reduce its rental charge, but “enough deals” to make the business viable had “not been made”.
The court process is different from a Company Voluntary Arrangement (CVA), in that owners may be forced to agree to contract changes, even if they disagree, following new insolvency laws introduced in June.
NCP estimates that 85% of its owners support its restructuring proposal.
“Park24, NCP’s largest shareholder, continues to support its restructuring plan, but given ongoing losses in the UK, said it will only continue to fund the company if the restructuring plan is successful,” the company said.
“NCP remains committed to working constructively with its owners and all of its creditors and providing them with a mutually beneficial long-term outcome through this restructuring plan.”