Real Estate Opportunities (REO), owner of the Battersea Power Station site, is in talks over its debts.
Dublin-based REO this morning said that it had £556m of debt that was due to be repaid before the end of this year and a further £201m by the end of 2010.
The group said that all but one of its loans – a £226m facility with Bank of Scotland and Bank of Ireland – were currently in compliance with agreed covenant. However, it said that a waiver of this loan will be received in due course.
REO said it had prepared a financial plan at the end of last year for the company that assumed debt due to be repaid within the next year would be rolled over and renewed on broadly similar terms.
As of June 30, REO had total borrowings of £1.6bn, cash of £61m and a deficit on consolidated shareholders equity of £88m.
Chairman Ray Horney said: “The board’s continued priority is to safeguard the company’s financial position and while we are concerned about the impact of this short term uncertainty on the company’s performance, we are ensuring that we continue to maintain our strong relationships with our lenders until the longer term solution in the form of NAMA regarding land and development bank loans resolved.”
He added: “Until the company reaches some certainty around future banking arrangements and its financial position, the board retains its cautious outlook for the rest of the financial year.”
REO said that it expects to realise between £35m and £40m in cash following the completion of a number of corporate transactions that were currently being explored and believed that it had adequate cash and cash equivalents to meet its working capital requirements until November 2010.
The group reported a 70% drop in its net asset value per share in the six months between 31 December 2008 and 30 June. NAV at 30 June was 30.9p, down from 104.1p.
It said that a portfolio revaluation had seen its worth fall by 15% to £1.62bn during the period, down from £1.9bn at 31 December 2008.
