The owners of the stalled 1m sq ft Pinnacle tower in Bishopsgate, EC2, are close to agreeing a three-year lifeline for the City development.
Development manager Arab Investments is in advanced talks with HSH Nordbank to extend the £140m loan used to fund the purchase of the site in 2007.
The loan is due to expire next month and has already been granted two one-year extensions.
Arab is acting on behalf of the Saudi Economic and Development Company, which comprises more than 60 investors and owns 90% of the scheme – set to become the City’s tallest tower.
A deal would end months of speculation over the future of the Pinnacle and allow the owners much-needed breathing space as they seek a prelet before restarting construction. Building work was halted in January.
A prelet of around 35% is needed to get work on the £1bn project going again.
Architect Kohn Pedersen Fox is also looking at ways to redesign the tower to bring down the estimated £800m construction costs in an attempt to kick-start the scheme.
SEDCO had been exploring the sale of part of its stake in the tower to raise fresh equity, with the development and investment arm of Brookfield widely rumoured to be in talks with the investors. However, sources said that the three-year loan extension would make a sale less necessary.
The proposed 64-storey Pinnacle, which is stuck at seven storeys, has been dogged by funding issues for several years. HSBC was tasked more than two years ago with arranging a £600m financing deal to help fund construction of the 1m sq ft development.
And earlier this month the court ordered the owners of the tower to pay more than £14m to contractor Brookfield Multiplex in unpaid fees and interest.
Lawyers for the owners said they were in “complex tripartite” negotiations in an attempt to resolve both the £14m due to Multiplex and “wider issues”.
All parties declined to comment.
samantha.mcclary@estatesgazette.com
