Lenders have moved in to take control of Battersea Power Station, throwing plans to extend the Northern line and create an enterprise zone in the south London area into doubt.
Lloyds Banking Group and the Irish National Asset Management Agency (Nama) are to notify the holding company behind the Grade II listed building, Battersea Power Station Shareholder Vehicle (BPSSV), that they are looking to take the site into receivership. Ernst & Young was appointed as administrator ahead of a high court hearing on December 12.
The lenders’ move comes just days after Mayor of London Boris Johnson and chancellor George Osborne visited Battersea ahead of the Autumn Statement. Osborne announced plans to extend the Tube line to the power station, which could have been at the heart of a major office, retail and residential development.
Lloyds and Nama will take control of the stalled sales process for the derelict 38-acre site, which has already got planning permission for 900,000 sq metres of office and retail space, as well as 3,400 homes. The site has recently attracted attention from Roman Abramovich’s Chelsea Football Club, British Land and private equity group Blackstone.
The landmark building was acquired by Irish property tycoons Richard Barrett and Johnny Ronan’s subsidiary Real Estate Opportunities (REO) in 2006, but some £502m of debts owing on the project have now been called in by lenders. Lloyds and Nama want £325m back, while Victor Hwang’s Oriental Properties, the previous owner of Battersea, wants £178m repaid on a vendor loan.
A statement from REO said: “The BPS [Battersea Power Station] subsidiaries are currently not in a position to satisfy these demands for repayments. The company has also been advised that NAMA and Lloyds Banking Group have applied to the English court for the appointment of administrators.”
REO had hoped to convert the power station into a huge office and residential development, valuing the site at £498m at the end of last year. But the cost of installing infrastructure to Battersea dampened the prospect of any major work taking place, while a potential project would be dependent on the Northern line being extended to the area as outlined in the chancellor’s Autumn Statement.
Battersea Power Station is Europe’s largest brick building and was built in the 1930s. The landmark has featured on a Pink Floyd album cover, along with films such as Sir Ian McKellen’s Richard III and the Beatles movie Help!