A Malaysian property company is in discussions to take control of Battersea Power Station and fund a £5.5bn redevelopment of the site.
The Daily Telegraph understands that SP Setia has agreed terms with Irish group Real Estate Opportunities to take a majority stake in the landmark power station through acquiring the bank debt that is threatening to derail the redevelopment.
However, the lenders to the site, Ireland’s National Asset Management Agency and Lloyds, are understood to have serious concerns about the proposals.
The Far Eastern investor made a formal offer last week to the lending banks to buy their £300m of debt at around 85p in the pound, or £255m.
But the lenders, who are considering the bid and have the power to pull the plug on the Battersea project, are unhappy with the price. They are thought to be keen to explore other options for the power station, such as Roman Abramovich building a new stadium for Chelsea.
SP Setia is understood to have discussed the investment with Boris Johnson, the Mayor of London, but any deal must be approved by the banks. The £300m of debt backing the site matured on August 31 without being repaid by REO and this can be called in on demand.
REO has been seeking an investor for months to repay the debt and rescue its project to build 3,400 homes, a conference centre, 10m sq ft of offices and retail space at Battersea.
Under the tie-up with SP Setia, it would keep a minority stake in the special purpose vehicle that owns the power station and continue to manage the project.
Victor Hwang, who sold the power station to REO in 2006, could also take a minority stake. It is understood that some of the £170m he is owed by REO will be converted into equity with the rest paid off, although the details are still being ironed out.
Battersea Power Station has lain dormant since 1983 – when the power station was shut down.
A deal would mark the first foray into Europe for SP Setia, which is worth more than £1.4bn. The company is behind major development projects in Malaysia, Vietnam and Australia, where it is developing an apartment complex in Melbourne called Fulton Lane.
REO and the lenders declined to comment last night. SP Setia could not be reached.
from: Thedailytelegraph
