An Historical Opportunity!
Battersea Power Station bids to be made in early 2012 | SW Londoner
Friday, December 23, 2011
Wednesday, December 21, 2011
The Collapse of Battersea's Latest Plans
A not so flattering assessment of the owners, but informative nonetheless. Article from Julia Kollewe at the Guardian.
Battersea power station, a grade-II listed building, was decommissioned in 1983. Photograph: Dominic Lipinski/PA
The flamboyant Irish property tycoon Johnny Ronan and his business partner Richard Barrett have kept a low profile since their £5.5bn plan to revamp Battersea Power Station ignominiously collapsed into administration last week.
They bought the 16-hectare site with the derelict London landmark, Europe's biggest brick building, which has stood empty since it was decommissioned 28 years ago, for £400m in 2006. Five years later, their Real Estate Opportunities (REO) vehicle had run up debts of more than £500m and still not found an investor for the south-west London site.
REO's main lenders РLloyds Banking Group and Ireland's state "bad bank", the National Asset Management Agency (Nama) Рlost patience and put the power station holding company into administration in the hope that this would facilitate a sale of the site. Nama is thought to favour Chelsea football club, which has hired developer Mike Hussey and international "starchitect" Rafael Vi̱oly to draw up a plan for a potential 55,000 stadium at the site.
The Malaysian property firm SP Setia, whose previous bids were spurned by REO and the lenders, and a number of UK developers, private equity firms and sovereign wealth funds are also understood to be in the frame.
Some developers say the Irish duo failed to attract a partner for the Battersea revamp partly because of their reputation for being litigious. At one stage in the past, their company Treasury Holdings, which owns 50.7% of REO, was involved in more than 30 lawsuits simultaneously. "REO are a good developer, but [Ronan and Barrett] are exceedingly litigious," said a London-based developer. "A lot of investors didn't want to work with them."
Legal chaos
Barrett once wrote to Paul Clinton, a property developer with whom the pair had clashed repeatedly over a Dublin shopping mall: "Certain opponents of ours have underestimated our ability to cause legal chaos to their detriment."
Michael Smith, former chairman of conservation agency An Taisce, National Trust for Ireland, described Treasury as "cavalier, litigious and gratuitously truculent", referring to court papers.
Further hurdles were the large debts run up by the pair. To some extent, the latest failed redesign for Battersea has fallen victim to the Irish property boom and bust. In April 2009, the Irish government created Nama to buy up impaired property loans from Ireland's struggling banks. Treasury, one of the largest Irish property developers, had €1.4bn (then about £1.2bn) of its €2.7bn loans taken over by Nama.
Not long after, in March 2010, Ronan had a public bust-up outside a pub in Ranelagh with his glamorous former girlfriend Glenda Gilson, a model and TV star. After the fracas, Ronan, now 57, whisked their 25-year-old mutual friend Rosanna Davison, a former Miss World and daughter of singer Chris de Burgh, off in his private jet to Marrakech for a reported €60,000, week-long extravaganza. Along with a female friend of Davison, they checked into the €500-a-night La Mamounia Hotel. Davison later described it as a "bout of Sunday afternoon drinking gone crazy" to the Irish Independent. Officials at Nama were furious.
Since then, the bearded and pony-tailed tycoon – known in the Irish press as "the Buccaneer" – has had to tone down his lavish lifestyle and even sold his private jet this summer, along with his black Maybach limousine. He reportedly left the country for a while, but has been sighted in Dublin recently.
The son of a pig farmer in Tipperary who later branched out into property, Ronan trained as an accountant but soon followed his father into developing offices. In 2009, his wealth was listed by the Sunday Times as €239m but by May 2011 both Ronan and Barrett had dropped off the list of Ireland's richest. Ronan's son, a pony-tailed "Mini-Me", also joined the property world and worked for REO on the Battersea site for some time, where he was described as "very charming and agreeable in an Irish kind of way" by a local resident.
Ronan met Barrett at Castleknock College, a private secondary school for boys in Dublin, and they later decided to become partners after bumping into each other on the same deal. A barrister who hails from a wealthy grain merchant family in Co Mayo, Barrett keeps out of the limelight. He is described as "very bright" and the brains behind Treasury.
One London developer described the pair as "the only financially sophisticated developers in Nama – with [virtually] no personal guarantees or borrowings who did everything on a corporate structure".
Treasury was formed in 1989 and named after the pair's first major development, the Treasury building in Dublin (now, coincidentally, home to Nama). The company controls more than 130 property projects across Ireland, the UK, Russia, Singapore and China, with a value of more than €4.6bn, and is one of the most prominent western developers in China. A £125m bid for the Millennium Dome in London in 2001 collapsed after Tony Blair stepped in to block the sale.
Battersea power station, a grade-II listed building, was decommissioned in 1983. Photograph: Dominic Lipinski/PA
The flamboyant Irish property tycoon Johnny Ronan and his business partner Richard Barrett have kept a low profile since their £5.5bn plan to revamp Battersea Power Station ignominiously collapsed into administration last week.
They bought the 16-hectare site with the derelict London landmark, Europe's biggest brick building, which has stood empty since it was decommissioned 28 years ago, for £400m in 2006. Five years later, their Real Estate Opportunities (REO) vehicle had run up debts of more than £500m and still not found an investor for the south-west London site.
REO's main lenders РLloyds Banking Group and Ireland's state "bad bank", the National Asset Management Agency (Nama) Рlost patience and put the power station holding company into administration in the hope that this would facilitate a sale of the site. Nama is thought to favour Chelsea football club, which has hired developer Mike Hussey and international "starchitect" Rafael Vi̱oly to draw up a plan for a potential 55,000 stadium at the site.
The Malaysian property firm SP Setia, whose previous bids were spurned by REO and the lenders, and a number of UK developers, private equity firms and sovereign wealth funds are also understood to be in the frame.
Some developers say the Irish duo failed to attract a partner for the Battersea revamp partly because of their reputation for being litigious. At one stage in the past, their company Treasury Holdings, which owns 50.7% of REO, was involved in more than 30 lawsuits simultaneously. "REO are a good developer, but [Ronan and Barrett] are exceedingly litigious," said a London-based developer. "A lot of investors didn't want to work with them."
Legal chaos
Barrett once wrote to Paul Clinton, a property developer with whom the pair had clashed repeatedly over a Dublin shopping mall: "Certain opponents of ours have underestimated our ability to cause legal chaos to their detriment."
Michael Smith, former chairman of conservation agency An Taisce, National Trust for Ireland, described Treasury as "cavalier, litigious and gratuitously truculent", referring to court papers.
Further hurdles were the large debts run up by the pair. To some extent, the latest failed redesign for Battersea has fallen victim to the Irish property boom and bust. In April 2009, the Irish government created Nama to buy up impaired property loans from Ireland's struggling banks. Treasury, one of the largest Irish property developers, had €1.4bn (then about £1.2bn) of its €2.7bn loans taken over by Nama.
Not long after, in March 2010, Ronan had a public bust-up outside a pub in Ranelagh with his glamorous former girlfriend Glenda Gilson, a model and TV star. After the fracas, Ronan, now 57, whisked their 25-year-old mutual friend Rosanna Davison, a former Miss World and daughter of singer Chris de Burgh, off in his private jet to Marrakech for a reported €60,000, week-long extravaganza. Along with a female friend of Davison, they checked into the €500-a-night La Mamounia Hotel. Davison later described it as a "bout of Sunday afternoon drinking gone crazy" to the Irish Independent. Officials at Nama were furious.
Since then, the bearded and pony-tailed tycoon – known in the Irish press as "the Buccaneer" – has had to tone down his lavish lifestyle and even sold his private jet this summer, along with his black Maybach limousine. He reportedly left the country for a while, but has been sighted in Dublin recently.
The son of a pig farmer in Tipperary who later branched out into property, Ronan trained as an accountant but soon followed his father into developing offices. In 2009, his wealth was listed by the Sunday Times as €239m but by May 2011 both Ronan and Barrett had dropped off the list of Ireland's richest. Ronan's son, a pony-tailed "Mini-Me", also joined the property world and worked for REO on the Battersea site for some time, where he was described as "very charming and agreeable in an Irish kind of way" by a local resident.
Ronan met Barrett at Castleknock College, a private secondary school for boys in Dublin, and they later decided to become partners after bumping into each other on the same deal. A barrister who hails from a wealthy grain merchant family in Co Mayo, Barrett keeps out of the limelight. He is described as "very bright" and the brains behind Treasury.
One London developer described the pair as "the only financially sophisticated developers in Nama – with [virtually] no personal guarantees or borrowings who did everything on a corporate structure".
Treasury was formed in 1989 and named after the pair's first major development, the Treasury building in Dublin (now, coincidentally, home to Nama). The company controls more than 130 property projects across Ireland, the UK, Russia, Singapore and China, with a value of more than €4.6bn, and is one of the most prominent western developers in China. A £125m bid for the Millennium Dome in London in 2001 collapsed after Tony Blair stepped in to block the sale.
Monday, December 12, 2011
Setback for the Battersea Powerstation Redevelopment
Another setback for the project that received all approvals including the greenlight on Wandsworth Underground extension. It seemed like all the pieces were in place except for... financing!
Andrew Winning/Reuters
By Chris Spillane and Neil Callanan
Dec. 12 (Bloomberg) -- The owner of Battersea Power Station, the London landmark slated for a 5.5 billion-pound ($8.6 billion) redevelopment, was put into administration by a U.K. judge after it failed to repay senior creditors.
Judge Geoffrey Charles Vos in London today granted a request by creditors led by Lloyds Banking Group Plc and Ireland’s National Asset Management Agency to appoint an administrator to sell the site. The group will try to recover the entire 502 million pounds owed by the project’s owners by selling the site, two people familiar with the matter said earlier this month.
Ernst & Young was appointed to administer investment units of Battersea Power Station Shareholder Vehicle Ltd. including REO Power Station Ltd. REO Site Assembly Ltd., REO 88 Kirtling St. Ltd. and REO 8 Brooks Court.
“We came to the conclusion -- with the other lenders -- that such a move would offer the best means of getting the sales process for the site back on track, and through that moving on with the regeneration of the site,” NAMA spokesman Ray Gordon said by telephone.
Planning Consent
The 38-acre (15-hectare) site was valued at 500 million pounds, developer Real Estate Opportunities said on Oct. 26. REO was given planning consent a year ago for the redevelopment of the site, which is 2.2 miles (3.5 kilometers) by car from the Houses of Parliament. Existing plans include a commitment to contribute more than 200 million pounds toward extending a London Underground subway line.
The assets of REO, which are in Ireland, aren’t affected by the administration order, the company said today in a statement.
Creditors called in loans to Battersea Power Station Shareholder Vehicle on Nov. 29. Chelsea Football Club Ltd., owned by Russian billionaire Roman Abramovich, hired developer Almacantar SA to help it find a place for a new stadium and said one of the options was at the Battersea site.
“After several months of discussions and still no acceptable offers on the table, administration is the only means we have to ensure that a sales process is put back on track,” Lloyd’s spokesman Emile Abu-Shakra said in a statement. “Without a financially stable owner, the site’s future remains unclear and that’s a situation we want to avoid.”
Battersea Power Station, featured on the cover of Pink Floyd’s 1977 album “Animals,” was designed by Giles Gilbert- Scott, who also devised the red public telephone box, and built in two stages, according to its website. The plant supplied a fifth of London’s electricity in the early 1950s, according to the Battersea Power Station Community Group website.
“The uncertainty over Battersea Power Station redevelopment has been known for some time,” a spokesman for the London mayor’s office said after creditors called in the REO loans. “We are totally confident that new investors will come forward to take over the Battersea Power Station development.”
--Editors: Jeff St.Onge, Ross Larsen.
To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net; Neil Callanan in London at ncallanan@bloomberg.net.
To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.
Andrew Winning/Reuters
By Chris Spillane and Neil Callanan
Dec. 12 (Bloomberg) -- The owner of Battersea Power Station, the London landmark slated for a 5.5 billion-pound ($8.6 billion) redevelopment, was put into administration by a U.K. judge after it failed to repay senior creditors.
Judge Geoffrey Charles Vos in London today granted a request by creditors led by Lloyds Banking Group Plc and Ireland’s National Asset Management Agency to appoint an administrator to sell the site. The group will try to recover the entire 502 million pounds owed by the project’s owners by selling the site, two people familiar with the matter said earlier this month.
Ernst & Young was appointed to administer investment units of Battersea Power Station Shareholder Vehicle Ltd. including REO Power Station Ltd. REO Site Assembly Ltd., REO 88 Kirtling St. Ltd. and REO 8 Brooks Court.
“We came to the conclusion -- with the other lenders -- that such a move would offer the best means of getting the sales process for the site back on track, and through that moving on with the regeneration of the site,” NAMA spokesman Ray Gordon said by telephone.
Planning Consent
The 38-acre (15-hectare) site was valued at 500 million pounds, developer Real Estate Opportunities said on Oct. 26. REO was given planning consent a year ago for the redevelopment of the site, which is 2.2 miles (3.5 kilometers) by car from the Houses of Parliament. Existing plans include a commitment to contribute more than 200 million pounds toward extending a London Underground subway line.
The assets of REO, which are in Ireland, aren’t affected by the administration order, the company said today in a statement.
Creditors called in loans to Battersea Power Station Shareholder Vehicle on Nov. 29. Chelsea Football Club Ltd., owned by Russian billionaire Roman Abramovich, hired developer Almacantar SA to help it find a place for a new stadium and said one of the options was at the Battersea site.
“After several months of discussions and still no acceptable offers on the table, administration is the only means we have to ensure that a sales process is put back on track,” Lloyd’s spokesman Emile Abu-Shakra said in a statement. “Without a financially stable owner, the site’s future remains unclear and that’s a situation we want to avoid.”
Battersea Power Station, featured on the cover of Pink Floyd’s 1977 album “Animals,” was designed by Giles Gilbert- Scott, who also devised the red public telephone box, and built in two stages, according to its website. The plant supplied a fifth of London’s electricity in the early 1950s, according to the Battersea Power Station Community Group website.
“The uncertainty over Battersea Power Station redevelopment has been known for some time,” a spokesman for the London mayor’s office said after creditors called in the REO loans. “We are totally confident that new investors will come forward to take over the Battersea Power Station development.”
--Editors: Jeff St.Onge, Ross Larsen.
To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net; Neil Callanan in London at ncallanan@bloomberg.net.
To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.
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