The London landmark faces an uncertain future
Battersea Power Station has been put into administration after it failed to pay back senior creditors.
The south London landmark was recently put at the heart of plans for a £5.5bn redevelopment project, which would have seen the Northern line extended and an enterprise zone created.
However, the Irish National Asset Management Agency (NAMA) and Lloyds Banking Group have now been given permission to appoint an administrator to sell the site. Ernst & Young was appointed as administrator to the vehicles owning Battersea Power Station after judge Geoffrey Charles Vos granted the creditors’ request at the High Court in London.
Real Estate Opportunities (REO), an Irish-based group that has a majority stake in the site, confirmed that Ernst & Young had been named as administrator to four subsidiary businesses due to £325m of debt owned to NAMA and the banks. A formal sales process will now begin to find a developer for the site, which is expected to attract the interest of Malaysian property firm SP Setia, British developers Berkeley and Development Securities, as well as Chelsea Football Club.
A spokesman for mayor of London Boris Johnson’s office said they had been aware of the uncertainty over Battersea “for some time”. He added: “We are totally confident that new investors will come forward to take over the Battersea Power Station development.”
REO has not been able to agree a deal with a new investor to pay off debts of more than £500m which are outstanding against the Grade-II listed power station. REO was given additional time to find a new investor after the £325m owed to NAMA and Lloyds expired at the end of August. But the banks called in the debt last month after being angered by an offer from SP Setia, supported by REO, to purchase the debt for £262m.
The Irish group had obtained planning permission for a £5.5bn project including 3,400 new homes and 10 million sq ft of commercial space at Battersea Power Station, which has been unused since 1983. The power station could yet face more years being left dormant now REO’s involvement has come to an end. It took REO five years and £50m to secure planning permission for the site.
In a statement, REO pointed out the administration only affected its four subsidiary companies of the Battersea Power Station Shareholder Vehicle, of which REO owns 54 per cent. The assets of REO, which are based in Ireland, are not affected by the administration order.