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Battersea Power Station owner plunges to further losses of £929 million.
Real Estate Opportunities Plc, the owners of Battersea Power Station, today reported that after a traumatic 14 months of trading to 28th February 2010, it had sunk further into losses, with a pre-tax loss of £929 million ( from £367 million in 2008).
It's total portfolio has fallen in value by 43% in the period to £1097 million, although this is mainly due to the collapse in values in Ireland, as Battersea has only fallen 4% to £388 million in the period, and it's value has been rising in recent months to almost wipe out earlier losses.
The firm has resolved to seek shareholder approval for a transfer of the BPS project into a separate listed vehicle. New lending terms have been negotiated with both Lloyds Banking Group (previously Bank of Scotland) and NAMA (previously Bank of Ireland) whereby the existing Battersea Power Station banking facility is to be extended and all outstanding breaches waived. All that is needed now is approval of it's planning application for the site.
In it's investment portfolio the firm presently has 90% occupancy, with only 3.75% of it's €48.3 million rent roll in arrears. Blue chip tenants such as Vodafone, Merrill Lynch, KPMG and Marks & Spencer account for over 63% of the portfolio by rent. Rent weighted average lease length is approximately 11 years. The firm has continued building out it's massive Montevetro development in Barrow Street Dublin, which will impact it's occupancy when that space hits a flat Dublin market.
REO has total debt of £1720 million, well in excess of it's asset value, and owes it's banks £1072 million. Of this some £815 million of loans are from Allied Irish Bank, Anglo Irish Bank, Bank of Ireland, and Irish Nationwide, which have now been taken into NAMA. The firm has a deficit on it's shareholders funds of £722 million.
Ray Horney, Chairman, said:
"It has been an exceptionally challenging period for the Company , as unprecedented conditions in the UK and Ireland impacted real estate valuations, and credit and liquidity remained very limited. However, the Company has worked hard and is confident that it will be able to strengthen the balance sheet as we initiate discussions with certain key holders of loan instruments and continue to deliver a robust operational performance in the investment portfolio. The Board has also resolved to pursue a demerger of Battersea Power Station into a separate listed vehicle in time to coincide with the introduction of a new investor in the project. Whilst uncertainty remains with regard to the economic outlook, the Board remains confident that the quality of the Company's portfolio and the experience and commitment of management will ensure the Company is on a solid footing as markets recover."
It's total portfolio has fallen in value by 43% in the period to £1097 million, although this is mainly due to the collapse in values in Ireland, as Battersea has only fallen 4% to £388 million in the period, and it's value has been rising in recent months to almost wipe out earlier losses.
The firm has resolved to seek shareholder approval for a transfer of the BPS project into a separate listed vehicle. New lending terms have been negotiated with both Lloyds Banking Group (previously Bank of Scotland) and NAMA (previously Bank of Ireland) whereby the existing Battersea Power Station banking facility is to be extended and all outstanding breaches waived. All that is needed now is approval of it's planning application for the site.
In it's investment portfolio the firm presently has 90% occupancy, with only 3.75% of it's €48.3 million rent roll in arrears. Blue chip tenants such as Vodafone, Merrill Lynch, KPMG and Marks & Spencer account for over 63% of the portfolio by rent. Rent weighted average lease length is approximately 11 years. The firm has continued building out it's massive Montevetro development in Barrow Street Dublin, which will impact it's occupancy when that space hits a flat Dublin market.
REO has total debt of £1720 million, well in excess of it's asset value, and owes it's banks £1072 million. Of this some £815 million of loans are from Allied Irish Bank, Anglo Irish Bank, Bank of Ireland, and Irish Nationwide, which have now been taken into NAMA. The firm has a deficit on it's shareholders funds of £722 million.
Ray Horney, Chairman, said:
"It has been an exceptionally challenging period for the Company , as unprecedented conditions in the UK and Ireland impacted real estate valuations, and credit and liquidity remained very limited. However, the Company has worked hard and is confident that it will be able to strengthen the balance sheet as we initiate discussions with certain key holders of loan instruments and continue to deliver a robust operational performance in the investment portfolio. The Board has also resolved to pursue a demerger of Battersea Power Station into a separate listed vehicle in time to coincide with the introduction of a new investor in the project. Whilst uncertainty remains with regard to the economic outlook, the Board remains confident that the quality of the Company's portfolio and the experience and commitment of management will ensure the Company is on a solid footing as markets recover."
Wed, 23rd Jun 2010