Lenders to Battersea Power Station have finally called time on site owner Real Estate Opportunities.
Ireland’s National Asset Management Agency and Lloyds Banking Group have demanded repayment of £324m of debt secured against the South London icon. In addition, previous owner Victor Hwang’s Oriental Property Company has demanded repayment of £178m.
The move will topple the subsidiaries which own the troubled site into administration later this month.
The debt is owed by subsidiaries of Battersea Power Station Shareholder Vehicle Limited, the holding company of Battersea Power Station that was formed when the site’s debt was restructured in April. BPSS is 54% owned by REO.
REO said in a statement this evening: “The BPS subsidiaries are currently not in a position to satisfy these demands for repayment. The company has also been advised that Nama and Lloyds Banking Group have applied to the English court for the appointment of administrators to certain of the BPS subsidiaries and that a hearing for this purpose is to be held on 12 December 2011.”
Administrators at Ernst & Young, which has been advising lenders to the site for several months, are expected to be appointed.
REO said it remains in discussions which may result in the disposal of the group’s interest in the Battersea Power Station site and repayment of associated liabilities. But it acknowledged that: “There is no certainty that any such transaction will be effected.”
The news comes days after Lloyds and Nama rejected a bid for the site from Malaysian investor SP Setia.
Many other bidders for the site – where plans have been drawn up for a £5.5bn redevelopment – have been waiting for administrators to be appointed so that an open-market sales process can be run.
REO has more than £1bn of debt in total. The company’s other assets, which are situated in Ireland, are unaffected. REO said it has recently received term sheets from Nama, the principal lender in respect of its Irish assets, indicating its continued support for the company’s business in Ireland.
julia.cahill@estatesgazette.com
