Battersea & REO, what’s the story?

Battersea power station was bought for £400m in 2006, REO took a loan for £226m other £134 was cash/other equity, the purchase was split 50/50 between BOI and BoS in London. only exposure for Bank of Ireland was that loan and now it is in NAMA, people are making a big deal about this and it is important to look at the facts rather than what it represents.

The BOI loan has gone to NAMA and BOS was taken by LLoyds, that is the current state of play. Lloyds and NAMA agreed to extend the loan facility to august 2011 – so they (REO) can get through the planning process, which happens to be the single largest planning application in the history of the UK, literally a truck load of paperwork went into the council in connection with the station.

Exposure on the loan is now at £100m, it has been a performing capital and interest loan. While the value of Battersea fell as all properties have, it also rose in the …

Read More