THE NATIONAL ASSET Management Agency (NAMA) and Lloyds bank are set to put Battersea Power Station back up for sale, after four subsidiaries of the site’s owner Real Estate Opportunities were put into administration yesterday.
The High Court in London yesterday appointed Ernst & Young as receivers over the project, after the REO subsidiaries failed to repay around £324 million (€383 million) in loans to NAMA and Lloyds.
The Irish Times reports that around two-thirds of that amount is payable to Lloyds. The debt to the two institutions fell due in August, but the lenders had given REO an opportunity to find new investment for the station.
UK Business Property quoted a Lloyd’s spokesman who said: “After several months of discussions and still no acceptable offers on the table, administration is the only means we have to ensure that a sales process is put back on track.”
REO had secured planning permission last year to build 3,400 homes and 10 million square feet of offices and retail space on the site, but had struggled to find investors willing to help fund the construction.
Another lender, Hong Kong developer Victor Hwang – who sold the site to REO for £400m in 2006 – had called in a £178m loan, the Guardian reports.
The move could potentially bring the ambitions of Chelsea FC owner Roman Abramovich – who has sought to relocate the famous club away from its current base at Stamford Bridge – a step closer to fruition.
It was reported last month that NAMA had been in preliminary talks with Abramovich about a potential purchase of the site – with Chelsea’s plans for a new stadium potentially able to incorporate large elements of REO’s planning permission.
Any move for Chelsea would pose other problems, however, because the site is difficult to access by current public transport – and because the club cannot move without losing the rights to the ‘Chelsea’ name, which is owned by Chelsea Pitch Owners plc.
REO is majority owned by Treasury Holdings, the development company led by well-known investors Johnny Ronan and Richard Barrett. Their vehicle was behind the construction of the National Convention Centre, and owns Treasury Buildings – which ironically houses NAMA’s headquarters.
REO had originally borrowed from Bank of Ireland and Bank of Scotland to fund the purchase of the site in 2006; NAMA took over the former’s loan last year.
As part of a restructuring operation last year, the group’s bondholders were given a major stake in the Battersea operation – leaving REO opening around 55 per cent of the venture.
REO and Treasury Holdings’ Irish assets and operations are unaffected by the London court order. Administration in the UK is a process similar to examinership under Irish law.
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