THE NATIONAL Asset Management Agency (Nama) is set to be fully repaid on loans outstanding on London’s Battersea power station, which is expected to be sold to a Malaysian-led consortium.
Once the site for a £5.5 billion redevelopment by Treasury Holdings on the banks of the Thames, the property has destroyed the dreams of a succession of developers over 30 years.
Now, the Malaysian Employees Provident Fund has reportedly paid nearly £400 million for the iconic property, which dominates the London skyline.
The Treasury-created special purpose vehicle, Battersea Power Station Shareholder Vehicle, had been 54 per cent owned by a Treasury Holdings subsidiary, REO.
However, it owes £324 million to Lloyds and Nama, and £178 million to Oriental Property. The most recent valuation on the site estimated it is worth just under £500 million.
The sum on offer from the Malaysians will be enough to pay off Nama and Lloyds – the holders of the senior debt on the property. Oriental will suffer losses as the junior debt-holder.
Last night, sources with knowledge of the transaction made clear that Nama would not be offering finance to the prospective owners of the property.
Following talks that have lasted for months, the Malaysians, along with two partner companies, are on the point of being appointed as preferred bidder.
One of the partners in the Malaysian-led consortium, SP-Setia, had previously offered to pay £262 million to buy debt held by Nama and Lloyds Banking Group, which was turned down.
Battersea, which once formed the backdrop on a Pink Floyd album cover, has planning permission for a £5.5 billion development scheme, complete with 3,400 new homes and 10m sq ft of offices and shops. However, the Malaysians, who have made an all-cash bid, want to increase the number of homes planned by Treasury, along with cutting the number of offices and shops.
A bid by the Roman Abramovich-owned Chelsea, to build a 60,000-capacity stadium, is understood to have been significantly below the offer from the EPF-led consortium, although the local council had not been in on the football club’s interest.
Last night, Nick Cuff, the chairman of planning at Wandsworth Council, told CoStar News that the council acknowledged new owners might want to change the existing planning permission.
“We are also aware that there will need to be some compromise with the power station but we would like to work on retaining its physical presence.
“However, we don’t want it to be an encumbrance to the development of the site so we will look for flexibility,” he went on, in words that will offer comfort to the prospective buyers.
The difficulties of safeguarding the industrial heritage of the site – which closed as a power station in 1983 – has scuppered plans by a succession of developers over 30 years.
Battersea, Mr Cuff said, must form ”the heart of a new town centre for the Nine Elms” district on the banks of the Thames, while the Northern Line tube must also be part of the development.
Last December, Nama and Lloyds went to the High Court in London to have Ernst Young appointed as administrators to the property, following the breakdown of negotiations with Treasury.
