Monday 24 July 2017

Lenders owed £150m on REO Battersea site roll over debt and interest

Donal O'Donovan

Donal O'Donovan

Lenders owed £150m (€170m) have agreed to allow Real Estate Opportunities PLC (REO) to suspend interest and debt repayments due on its Battersea Power Station debt until May of next year.

The deal is designed to allow breathing space to find a new investor for the real estate project that has debts of £412.55m but is not expected to get planning permission before the end of the year.

REO's deal pushes out the maturity date on some debt and suspends repayments on other debt.

REO, which is controlled by Treasury Holdings, bought the 38-acre Battersea site on the banks of the Thames in central London for £400m in 2006.

The latest deal is between the borrower and businessman Victor Hwang's Oriental Property, which is owned £150m through loan notes.

The loan notes were part of the consideration paid when REO bought the Battersea site from Mr Hwang in 2006.

He has agreed to defer all principal and interest payments due until May 31, 2011.

The Taiwanese businessman paid £10m for the site in 1993. He sold it for £400m, but only after agreeing to be partly repaid over time through the loan notes.

The deal with Mr Hwang clears the way for a deal already agreed with the National Asset Management Agency (NAMA) and Lloyds Bank, which are owed another €262.55m between them.

NAMA became a lender to REO when Bank of Ireland transferred a £112.5m loan to the bad bank.

In September, NAMA and Lloyds agreed to extend their loans until August 31, 2011, but only on condition that agreement could be reached with Mr Hwang.

REO is an offshoot of Treasury Holdings, a NAMA name. The Bank of Ireland loans have been transferred to NAMA.

Irish Independent

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