Friday 22 November 2019

REO needs to secure new funds for Battersea


Battersea power station
Battersea power station

Emmet Oliver

Real Estate Opportunities (REO), majority controlled by Treasury Holdings, was in danger of failing to agree a new funding package for the Battersea power station last night before a £260m (€294m) bank loan matured.

A loan held on the site by Lloyds Banking Group and NAMA is maturing, which could force REO to apply for forbearance from the banks. REO yesterday failed to make any public statement about the loan maturing, but it is understood negotiations over the site were continuing.

REO needs to bring in a private sector partner into the Battersea project and the lenders have hired Ernst & Young to advise on what kind of deal might work best for all parties.

REO has said a deal is close as negotiations with several partners is intensifying. Treasury Holdings, set up by Richard Barrett and Johnny Ronan, is the biggest shareholder in REO and Battersea is its largest potential asset awaiting development.

REO is hoping to attract a funder for Battersea and consequently persuade lenders to put in place a new debt package.

The loan can be called in at anytime, but REO believes lenders are in support of the company's plans and have no plans to take enforcement action.

British Land and Blackstone are reported to have expressed an interest in Battersea, but so far no parties have signed up. REO has planning permission to develop the iconic site, but it still needs a London Underground connection.

The company's UK team is leading the negotiations, but pressure is on REO to put in place new funding. The company also wants to remain the development manager of the site, but it is unlikely any new investor would give up management control of such a large project, many property sources believe.

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