REO faces Battersea debt deadline tomorrow

By Helen Roxburgh - Tuesday, August 30, 2011 15:13

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Real Estate Opportunities’ crucial circa £400m debt maturity deadline on Battersea Power Station is due to expire tomorrow, after its lenders appointed Ernst & Young to advise on the iconic redevelopment.

REO has £251m of debt secured against the scheme in a syndicate with Ireland’s NAMA; and another £146m loan which was provided by Victor Hwang’s Oriental Property when it sold the site to REO in 2006 for £400m.

Battersea’s owners REO, itself majority-owned by Irish investor, Treasury Holdings, said earlier this month they were in “final discussions” to find an equity partner to bring forward the £5bn redevelopment of the iconic site, with the support of its lenders. 

Ernst & Young is advising on options for the development and reviewing the sales process undertaken by REO to appoint an equity partner.

The review was understood to be concluded to time with the debt expiry date.

REO’s £250m senior lenders, Lloyds and NAMA, the Irish “bad bank”, have already extended the debt deadline once at the end of May this year.

At its last valuation in February, the power station site was valued at £500m. Options include refinancing the debt, selling either a 50% or the entirety of the stake in the site, or else securing the equity to build out the mammoth development.

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