Ex-Anglo boss has stake in €1bn Nama-bound REO
Johnny Ronan's property firm has big plans for its Battersea Power Station site in London to help it pay back money owed to the State's bad bank
The proposed development at Battersea Power Station in London
Sunday June 27 2010
WILLIE McAteer, the former group finance director and chief risk officer of bailed-out Anglo Irish Bank, owns a stake in one of its biggest developer clients, Johnny Ronan's Real Estate Opportunities (REO), the Sunday Independent has learned.
The stake in the Jersey Island-registered property investment firm REO, which this week announced plans to float off its development at the iconic Battersea Power Station in London, is known as 7.5 per cent cumulative unsecured loan stock.
McAteer and his wife own the shares through a holding company called Fastrock Holdings, according to new details that have come to light.
Having resigned from the board of Anglo in 2009, following the exit of fellow board members Sean FitzPatrick, Lar Bradshaw and David Drumm, McAteer was arrested and questioned by members of the Garda Bureau of Fraud Investigation in March of this year.
Grafton Group boss Michael Chadwick is also a small shareholder in REO, according to the shareholder register obtained in Jersey. Billionaire financier Dermot Desmond has been linked with a stake in REO -- but there were no shares held in his name or through any companies regularly associated with him.
The late John Finnegan, a well-known auctioneer who featured in the Ansbacher report, was also a major shareholder.
Last week REO -- whose biggest shareholder is Johnny Ronan and Richard Barrett's Treasury Holdings, with a 67 per cent stake in the Dublin and London listed company -- said that it owed the National Asset Management Agency (Nama) €997m after the State agency took over loans made to the company by AIB, Anglo Irish Bank, Bank of Ireland and Irish Nationwide.
REO last week reported a pretax loss of £900m (€1.09bn) and an underlying loss of £929m, which included a fall of £811m in the value of its properties in Britain and Ireland. The company owes a total of €2bn to its banks, while its properties are worth €1.3bn.
The firm has submitted a business plan concerning its future and that of the Battersea project to Nama's chairman, which will then be passed to a panel of consultants for independent review.
Over the next six to eight months, REO plans to float off the Battersea Power Station project to a separate company in order to bring in new investors who will then share the estimated £4.5bn cost of redeveloping the 40-acre site beside the River Thames.
It is understood the firm has drawn up a shortlist of possible backers after being approached by a number of international property groups, private equity firms and sovereign wealth funds from the Middle East and other countries.
Last autumn, REO submitted a planning application for the project to local authorities there and the firm hopes to get the green light for its plans in September. Any go-ahead would see the site's value soar from its current valuation of £388m and therefore improve the likelihood of the firm repaying its Nama loans.
Originally the plans included a 300-metre high glass "eco-dome" design intended to emphasise the project's green credentials. But REO subsequently had to revise its plans and cap the height of the project at 60 metres so that it would not obscure views of the Palace of Westminster from Waterloo Bridge.
The new plans also include office space, shops, restaurants and leisure facilities, along with 3,700 homes. The developers would also need to co-fund improved public transport access to the area, involving an extension of London Underground's Northern Line in order to make the project viable.
Whether McAteer would benefit from the project being given a green light, through a rise in the value of his shares, is unclear. Nor is it known whether Anglo lent him money to fund the purchase of the shares. He did not return calls on Friday evening.
What is known is that in March 2009 McAteer had a loan of €8m owing to Anglo, which was secured on shares in the bank that are now worthless following the bank's nationalisation. With 3.5 million shares at the end of 2008 -- more than any other member of Anglo's board at the time, apart from former chairman Sean Fitzpatrick -- McAteer's loan was originally non-recourse, meaning it was secured only on the shares. This was later changed to a full personal recourse basis.
- John Reynolds and Nick Webb
Originally published in
