There is still no news apparently on the planning application for the Battersea Power Station in London, one of the most expensive assets over which NAMA has some control. The site has been dormant for nearly 30 years and has been dogged by planning and development issues. However there appeared to be a head of steam behind the latest application to develop the site for residential and commercial use but a decision was expected in August. And yet no news.
Battersea is NAMA-developer Treasury’s most valuable asset. And REO, a Treasury company appears to suffering worrying delays in obtaining agreement to restructure payment terms on some of its debt. According to the company
“The Company announced on 7 September 2010 that the group’s £225 million power station facility with Bank of Scotland plc and The Governor and Company of the Bank of Ireland (on behalf of the National Asset Management Agency) and £37.55 million site assembly facility with Bank of Scotland plc have been extended to 31 August 2011 and all existing breaches been waived. The agreement was conditional, inter alia, on the Company effecting a compromise by 1 October 2010 with the holder of the £150 million series A and series B loan notes including in relation to all principal and interest. Negotiations with the loan note holder are ongoing and the lenders under the Battersea facilities have agreed to extend the date for a compromise to be reached to 10 October 2010. A further announcement will be made in due course.”
And today, ratings agency Fitch seem to be going head-to-head with REO by claiming that the €375m Eurohypo loan (secured on REO properties) may fail to repay in 2013. “The agency expects the loan to fail to repay at its scheduled maturity” says Emmet Oliver in today’s Independent citing Fitch. And yet REO say the loan can be repaid with excess funds in a reserve account.
And to conclude with the near-farcical: one of the men behind Treasury Holdings, the colourful Johnny Ronan is reported today to have been told by NAMA to cease making charitable donations from a company owned with litigation sensation Paddy McKillen.
UPDATE: 11th October, 2010. REO has announced an agreement of sorts with the holder of the series A and B loan notes which allows interest and principal payments to be deferred to May 2011. The company says that it will furnish details in due course. It is unclear from the announcement whether this agreement is conditional and requires the approval of the banks (and NAMA).
“The Company is pleased to announce it has signed an agreement (the “Agreement”) with the loan note holder which defers all principal and interest payments due until 31 May 2011. The Agreement also confirms the basis of a wider compromise arrangement, contingent upon the completion of detailed documentation and approval of the Banks, the loan note holder, the holders of the Company’s 7.5% convertible unsecured loan stock and the zero dividend preference shares issued by the Company’s wholly-owned subsidiary REO Securities Limited and REO’s ordinary shareholders. A further announcement setting out the agreed financial restructuring terms will be made in due course.” The owner of the series A and B loans is identified by Fox News as Oriental Property Limited (associated with Victor Hwang, and from whom REO acquired Battersea in 2006 for GBP £400m).
UPDATE: 12th October, 2010. Britain’s Telegraph reports that Wandsworth Borough Council is “scheduled” to make a decision on the planning application “next month”, that is November 2010.
NAMA Wine Lake 