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| Battersea Power Station was operational from 1937 until 1982 |
Treasury Holdings controlled Real Estate Opportunities Limited (REO) announced this morning that REO has exchanged contracts to purchase Battersea Power Station and its surrounding lands in London from Oriental Property Limited, a company owned by the Hwang family which also controls 100% of Parkview International London plc.
The Site, which covers 38 acres (of which six acres comprise the Power Station) is set alongside 380 metres of riverside frontage within the London Borough of Wandsworth. REO will acquire 100 per cent of the equity in the companies that hold freehold title to the site.
The amount payable by REO in respect of the acquisition is £400 million of which £250 million is payable in cash. This will be partly funded from REO's existing cash and £150 million of bank debt from the Bank of Scotland Corporate. The balance of £150 million is being satisfied by the issue by REO of loan notes to Oriental. In the event of REO issuing new shares for cash or assets, Oriental will have the right to exchange its loan notes for REO ordinary shares, at the issue price, subject to certain conditions and limitations, in particular Oriental's holding not exceeding 10 per cent. of the issued ordinary share capital in REO. In addition Oriental will be entitled to redeem its loan notes on a pro rata basis if part of the Site is sold. While its loan notes are outstanding, Oriental will retain a second charge over the Site.
The Battersea Power Station site
Battersea Power Station is one of the largest brick buildings in the world and the Site, together with the surrounding land, represents one of the largest urban regeneration projects in central London. The current masterplan for the Site envisages a mixture of housing, hotels, retail, conference and exhibition space. REO has engaged a full complement of technical and planning advisers.
Ray Horney, Chairman of REO, commented:
"We are delighted to become involved in a project that presents both a magnificent property development opportunity and challenge: the Power Station itself is a building that is an iconic part of central London's heritage and is set on a site which by virtue of its size and location offers an extraordinary development opportunity. No comparable site exists in London."
"Those who know the work of Treasury Holdings (REO's majority shareholder, which will lend its development expertise to this site) at Spencer Dock in Dublin should have great confidence that the site is in good hands. Spencer Dock, which is Dublin's largest urban regeneration project and comprises 52 acres, has proved both commercially successful and a magnificent addition to Dublin's building stock. REO looks forward to working closely with Wandsworth Borough Council, the relevant planning authorities and the local community to enable the Site to fulfil its potential."
Victor Hwang, Director of Oriental says:
"Our first priority has always been to ensure that the regeneration of Battersea Power Station would be seen through to completion. We have given a great deal of effort to create a world class project in one of the world's greatest cities."
"We have, over time, been in numerous discussions to seek a developer to continue with the project and to see this development through the construction phase to completion."
"It is right that the next phase and future of Battersea Power Station should now be transferred into a publicly listed company. This will assure that there is transparency and clear reporting requirements to the public, whose affection for this iconic building has never wavered."
Bob Bishopp, Director of Bank of Scotland Corporate added:
"We are pleased to be supporting REO in its acquisition of Battersea Power Station. They have an excellent track record in being able to identify and extract value from premium developmental schemes and their business objectives are wholly aligned with our philosophy of transacting with "partners of choice". We look forward to working with them on the redevelopment of Battersea which we feel certain will prove exciting and publicly rewarding."
