Creditors of Battersea Power Station led by the National Asset Management Agency (Nama) and Lloyds Banking Group will ask a court to put the landmark property's owner into administration.
The site is owned by Real Estate Opportunities, the listed company which is majority controlled by Treasury Holdings, the property company owned by developers Johnny Ronan and Richard Barrett.
Lenders owed £502 million (€586 million) will ask a UK court on December 12th to have administrators appointed for various units of Battersea Power Station Shareholder Vehicle Ltd., according to a statement.
They applied to a Jersey court today to put the companies into administration, a UK form of bankruptcy protection.
The companies "are not in a position to satisfy these demands for repayment," Jersey-based Real Estate Opportunities, which owns 54 per cent of Battersea Power Station Shareholder Vehicle, said in the statement.
The lenders rejected a £262 million bid last week from SP Setia Bhd., Malaysia's biggest public traded property developer by sales, to purchase the senior debt related to the London landmark.
Spokesmen for Nama and Lloyds declined to comment.
Administrators at Ernst & Young, which has been advising lenders to the site for several months, are expected to be appointed.
REO said in a statement: “The BPS subsidiaries are currently not in a position to satisfy these demands for repayment. The company has also been advised that Nama and Lloyds Banking Group have applied to the English court for the appointment of administrators to certain of the BPS subsidiaries and that a hearing for this purpose is to be held on 12 December 2011.”
Mr Barrett and Mr Ronan have relied on the support of Lloyds and Nama to proceed with a £5.5 billion redevelopment of the site that features the derelict coal-fired power station that closed 28 years ago.
Equity Swap Real Estate Opportunities, majority owned by the duo through their company Treasury Holdings, acquired the site five years ago today and has been seeking a partner to back the redevelopment project after obtaining planning consent in November last year.
Following a debt-for-equity swap involving some of the creditors, ownership of the 38-acre site transferred to Battersea Power Station Shareholder Vehicle. Another of the creditors seeking the appointment of an administrator is Oriental Property, controlled by former owner Hong Kong entrepreneur Victor Hwang, who provided £150 million of loans to help the Irish pair acquire the project.
The power station, with four 350-foot-high smokestacks, is Europe's largest brick building and is featured on the cover of Pink Floyd's album Animals.
Battersea Power Station was designed by Sir Giles Gilbert- Scott, who also devised the red public telephone box, and built in two stages, according to its website. The power station provided a fifth of London's electricity supply in the early 1950s, according to the Battersea Power Station Community Group website.
Bloomberg