Property firm Real Estate Opportunities (REO) said it will pursue plans to separate the Battersea Power Station project from its portfolio as it reported a loss before tax of more than £900 million.
The company plans to put the project into a separately listed vehicle by the end of the year, and will try to attract a long-term equity partner through a global roadshow.
The property, which has been derelict for over a quarter of a century, was valued at £388 million on February 28th, a 4 per cent fall in the 14-month period since December 31st 2008 but a 6 per cent rise since June 30th 2009, when it was worth £365 million.
REO lodged the largest planning application ever submitted in central London in September 2009 regarding the project, and it said it was optimistic that it would be "determined favourably" this year.
New lending terms have been agreed with Lloyds Banking Group and the National Asset Management Agency (Nama) to extend the existing bank facility for Batterseas Power Station and waive all outstanding breaches. The Battersea project, which was being supported by Irish and non-Irish banks, will require substantial funding over the coming years.
REO chairman Ray Horney said the 14-month period to the end of February had been challenging for the firm.
"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," he said.
"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 underlying loss of £929 million included a fall in valuation of £811 million and a £40 million impairment of the listed investment of China Real Estate Opportunities. In March, REO sold its 16.9 per cent stake in CREO for £27.68 million.
The company said net financial expenses of £112 million were incurred in the 14 months.
REO's loss after taxation was £828 million.
