Embattled shopping centre owner Intu is nearing a deal to sell stakes in two Spanish shopping centres so it can cut its debt pile.

A fund managed by Generali is the preferred bidder to buy a 50% stake in the Puerto Venencia centre in Zaragoza and the Intu Asturias centre in Asturias, according to Spanish newspaper El Confidencial.

Generali’s Axis Retail Partners vehicle was one of two final bidders alongside German shopping centre giant ECE, the paper reports. The 50% stakes are valued at a combined €425M (£387M).

Intu owns the two centres in a 50/50 joint venture with Canadian pension fund CPPIB. CPPIB has passed up the chance to buy Intu’s stake in the malls.

The UK REIT is also selling 50% of its Xanadu shopping centre in Madrid, which it bought in 2017 for €520M.

Intu is selling its Spanish assets to pay down debt: It needs to lower its loan-to-value levels, and is having to sell its strongly performing Spanish assets because there is nearly no appetite from buyers for UK shopping centres right now.

Earlier this month analysts at Green Street Advisors said that Intu’s assets would be worth less than its debt if they were properly marked to market. The company’s share price has dropped 80% in the past year due to worsening rental performance of its assets and worries about its debt levels.