Battersea signs RM7.12bil syndicated loan

  • Business
  • Wednesday, 29 Oct 2014

LONDON: Battersea Power Station yesterday signed a syndicated debt facility totalling £1.35bil (RM7.12bil) with a consortium of bankers that will fund the development of the second and third phase of the mammoth project.

The financing, which is one of the largest real estate financing transactions in recent years, comprises a £750mil facility to fund the development of the power station building, and a £600mil facility to fund the development of London’s newest high street, Electric Boulevard, comprising buildings designed by Gehry Partners and Foster + Partners.

CIMB Bank, Maybank and Standard Chartered Bank are acting as mandated lead arrangers, book runners and joint co-ordinators, while DBS Bank, National Bank of Abu Dhabi, OCBC Bank and RHB Bank are participating as primary syndicate members.

“These latest financing agreements are a further significant step in the development of Battersea Power Station, in bringing the iconic building back into public use after 30 years and in constructing the extraordinary buildings in Phase 3 designed by world-leading architects.

“Furthermore, these agreements will support the creation of jobs, affordable housing and enhanced transport within London,” said Battersea Power Station chairman Tan Sri Liew Kee Sin.

“The agreements are also a demonstration of the strength of the relationship between the shareholders of Battersea Power Station and the lenders, and we thank them for their support.”

At least two-thirds of the buyers for Phase 3 are expected to be locals, with Malaysians accounting for less than 5%.

Phase 3 is divided into 3A and 3B.

Liew said on the sidelines after the signing of the deal that he hopes Phase 3A, which will be launched on Friday, will see at least 60% sales within a week of its launch.

He said that once 3A was fully sold, enough cashflow would be generated to pay up the £400mil loan taken to buy the land for the entire project.

Liew had earlier said that the global launch of Phase 3 would enable Battersea Power Station to recoup its land cost of about £400mil. There is a possibility that the gross development value of the project will increase to £10bil from £8bil.

In the first phase, at least 50% of buyers were from the United Kingdom, and for Phase 2, at least 75% of units were bought by locals in the UK.

Battersea Power Station is embarking on a global tour to 13 cities in 11 countries that will be launched in London on Oct 31.

The aim of the tour is to seek the most exciting UK and global brands, businesses and restaurants to bring alive London’s newest high street and the capital’s largest and most central development.

“It’s a fantastic opportunity, as 47% of retail brands around the world are not in London,” said Battersea Power Station chief executive officer Rob Tincknell at a media conference.

As part of the tour, there will be an opportunity for people to purchase 539 of the 1,305 Gehry Partners and Foster + Partners-designed homes in Phase 3 of the development, which will be part of London’s newest pedestrianised high street.

Battersea Power Station in a statement said refurbishment work on the power station, including the replacement of the chimneys, is progressing well.

“The main construction work on the power station will commence in the first quarter of 2015 at the same time as the start of the construction of the Northern Line Extension, including the Zone 1 station at Battersea Power Station,” said the statement.

The signing of the agreement was held in the iconic Control Room A inside the power station with representatives from the mandated lead arrangers, book runners and joint co-ordinating banks, directors of Battersea Power Station and witnessed by the Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan.

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