Reo agrees deal with lenders

Real Estate Opportunities (Reo) said today it had agreed a deal with lenders that would see it defer interest and principal payments on some loans until the end of May.

The company has been holding talks to renegotiate part of its debt and float off one of its bigger assets, Battersea power station in London.

The company bought the power station at the end of 2006 for €600 million. It borrowed some of the cash used from Bank of Ireland, which transferred the debt to Nama earlier this year.

Last month, Reo said the group's facility with Bank of Scotland and the Bank of Ireland had been extended to August 31st, 2011. As part of the deal, all existing breaches been waived, on the condition that the company reached a compromise with the holder of the £150 million series A and series B loan notes by October 1st. It was later agreed with lenders that this date would be extended to October 10th 2010.

Reo said today it had signed the agreement, which would defer the payments until May 31st, and confirms the basis of a wider arrangement, subject to certain conditions.

Details of the agreed financial restructuring terms will be announced at a later date.

In June, Reo reported a €1 billion pre-tax loss for 2009, as the value of its properties was written down.

At the time it said that it intended placing Battersea power station in a separate listed vehicle and seeking an equity partner to help develop the property.