Banks on verge of putting receiver into Power

POWER Corporation, which owes banks more than £190 million is likely to be put into receivership within the next few days. Asked about the imminent appointment of a receiver, a spokeswoman for, Power said she could make no comment.

However, reliable industry sources say the announcement of a receivership could be made by the company before the weekend. Power has remained in existence only because the syndicate of unsecured banks, which are owed some £100 million, held back pending a restructuring and a cash injection by a new investor.

But when the investors, led by Mr John Beckwick, pulled out, if 1lost its share quotation less than three weeks ago and the appointment of a receiver then appeared inevitable.

The sources are not saying who will be appointed receiver. However, Mr Tom Grace, of Price Waterhouse, one of the country's lead receivers and liquidators, is thought to have been the banks first choice.

Power has, in effect, been in a form of quasi receivership for more than three years. The receiver is likely to stress that he will continue to keep the company in operation.

Being in receivership, rather than in a quasi receivership, will formalise the position and give the company some protection against its creditors. However, it appears inevitable that there will be a sale of some of the properties.

Under a restructuring which had been agreed, the syndicate of 12 banks, led by Irish Intercontinental Rank, was prepared to accept a 50 per cent write down on what they are owed because they are unsecured creditors. To compensate them for that dilution, they were to have had convertible rights into new shares.

Power has total bank debts of some £190 million, excluding accrued interest. The banks which are owed the other £90 million did not form part of the restructuring and, as creditors, rank above the syndicate as they are secured against individual properties. These secured banks can move on the individual properties, in line with their debenture agreements.

Power owns about a dozen properties in Ireland the US and Britain. The Irish properties consist of the Powerscourt Townhouse Centre in Dublin and three properties in Cork (Queens' Old Castle, Savoy Shopping Centre and the Courthouse Chambers). In Britain, it has the Royal Exchange Shopping Centre, in Manchester.

However, the bulk of its portfolio, around 85 per cent, is in the US. These include the San Francisco Shopping Centre; The Rhinelander Mansion, Madison Avenue, New York; 345/347 Rodeo Drive, Los Angeles; an interest in the Ambassador Hotel site in Los Angeles; and interests in 256 Worth Avenue, Palm Beach, Florida.

US retail properties have been very depressed and this is understood to have contributed to the unwinding of the restructuring package.

Power has not produced accounts for two years. Its last published results were for the six months to the end of September 1994. These revealed a pre tax loss of £5.6 million and net tangible assets of £9.2 million. However, a revaluation of the properties would put that into deficit.

Power now employs a skeleton staff of 26 people. Set up by Mr Robin Power in 1973, the shares reached a peak of 215p in 1990 but are now almost worthless.

When Mr Power resigned in 1995, he had personal debts of some £8 million which he had borrowed to buy company shares. His bankers have persistently declined to comment on the current status of his loans.

However, Mr Power has returned to the property market in recent months, buying property in Dublin and Cork. Three weeks ago, he paid more than £740,000 for two Dublin properties.