Business World

Wednesday 21 March 2018

£400m sale of Battersea 'will leave taxpayer worse off'

Battersea power station
Battersea power station
Donal O'Donovan

Donal O'Donovan

NAMA's £400m (€495m) sale of Battersea Power Station leaves the state agency worse off than if it allowed the London site to be sold to the same bidder last year, according to former owner Treasury Holdings.

NAMA and fellow lender Lloyds Bank took control of the property in December when they appointed Ernst & Young as administrators, the UK equivalent of receivership, over unpaid loans.

Since then the former owners Treasury Holding has been locked in an increasingly bitter dispute with NAMA.

Last night's comments came after Malaysian buyers SP Setia and Sime Darby entered exclusive talks to buy the site from the administrators after an auction process.

The Malaysians saw off 15 bids, including an offer from Chelsea Football Club, to win the right to move forward with exclusive negotiations yesterday.

The Battersea site includes a protected former power station and 15 acres of development land in central London. It has been a disaster for developers over the years, but remains a sought after project -- tipped to reap as much as €5.5bn for whoever manages to finish development.

The head of NAMA Brendan McDonagh welcomed confirmation of the deal last night, and said it means full repayment of all NAMA's debt linked to asset. However, Treasury Holdings said taxpayers would have done better under a deal that it put together last year with SP Setia, the same Malaysian firm leading the current acquisition team.

Under that plan Treasury would have shared in the profits made from developing Battersea, a spokesman said.

That could have helped it to pay back an even bigger share of the €1.7bn the company owes NAMA, the spokesman said.

A NAMA spokesperson declined to comment on the Treasury Holdings claims.

Treasury Holdings is owned by high-profile developers Johnny Ronan and Richard Barrett.

It became one of the biggest Irish developers during the boom -- building landmark commercial developments including the National Convention Centre and other large-scale buildings in Dublin's IFSC.


At the height of the boom it controlled assets valued in billions. Now the company is hanging by a thread, however, and has been described by NAMA as "hopelessly insolvent."

In December, Real Estate Opportunities (REO), a listed company controlled by the firm, lost control of the Battersea site.

Earlier this year NAMA also appointed receivers to a swathe of its best Irish assets over unpaid loans.

Since then the company and NAMA have been locked in a series of interlinked legal actions, mainly aimed at regaining the Irish assets, that are expected to drag on through much of this year.

Irish Independent

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