Nama and Lloyd's Bank set to take control of Battersea power plant

STATE ASSETS agency Nama and Lloyd’s Bank are poised to take control of Battersea power plant, the €600 million property part-owned by Treasury Holdings-backed Real Estate Opportunities (REO).

The pair are set to ask the British courts on December 12th to appoint accountants Ernst Young as administrators to Battersea Power Station Shareholder Vehicle Ltd, the REO-controlled company that owns the landmark London property. The power station company owes Nama and Lloyds about €380 million. Almost one third of this is due to the State agency. According to an REO statement yesterday, Nama and Lloyds have demanded immediate repayment. However, it added the power station company cannot repay the money.

REO confirmed that Nama and Lloyds have applied to the British courts for the appointment of administrators to the Battersea Power Station company and that a hearing is scheduled for December 12th. If the court appoints administrators, they could opt to sell Battersea. Last June, the property was valued at almost €600 million, the price REO originally paid for it. The Roman Abramovich-owned football club, Chelsea, is known to be interested in part of the site and has held talks with Nama and Lloyds.

REO bought Battersea for €600 million at the end of 2006. It transferred the property to Battersea Power Station Shareholder Vehicle earlier this year as a first step to bringing in a partner to develop the property.

REO, whose shareholders include Treasury Holdings, the property company owned by John Ronan and Richard Barrett, owns 54 per cent of the power station company. A group of REO creditors, who swapped their debt for shares in Battersea, hold a minority stake. Its statement pointed out that it is still in talks with interested parties that could result in a sale. A deal could end Nama’s and Lloyds’ administration action, if they were happy with its terms. Last week, they rejected a bid from Malaysian-based SP Setia to buy out the debt for 85 per cent of its total value.

REO’s Irish properties are not affected. It said yesterday it has received term sheets for a proposed business plan from Nama, which is also its main lender in the Republic. It is understood no final term sheets have been agreed with Nama.