TREASURY Holdings-backed property group Real Estate Opportunities (REO) will not pay interest due to a group of its creditors at the end of the month as it is in talks to renegotiate part of its debt and float off one of its bigger assets, Battersea power station in London.
REO is in talks with toxic loans agency Nama, to which it owes €997 million, Lloyd’s Bank and holders of its unsecured loan notes, and separately with a committee representing holders of its convertible unsecured loan stock and zero dividend preference shares, regarding a restructuring of its finances.
It reported yesterday that it has made progress towards agreeing the outline of a financial restructuring deal with the committee representing holders of the loan stock and preference shares. REO’s biggest backer, the John Ronan- and Richard Barrett-controlled Treasury Holdings, supports the proposal.
REO said yesterday that taking into account the status of the talks, it has determined not to pay the interest due on August 31st to holders of its convertible unsecured loan stock. The company agreed with creditors at the outset of the negotiations that it would not make any interest payments while the talks were under way.
REO reported last June that it lost just over €1 billion before tax in 2009, largely due to a writedown in the value of its properties.
At the time it said that it intends placing Battersea power station in a separate listed vehicle and seeking an equity partner to help develop the property. The talks to restructure its finances are part of this process.
REO did not reveal details of the proposal that it has agreed with the committee, but said that it is discussing it with the company’s other lenders, a group that includes Nama.
The committee, REO directors and Treasury Holdings account for £59.4 million of convertible loan stock, which represents 59 per cent of the total amount issued by the company, and for some 32.9 million zero dividend preference shares, representing 57 per cent of the total number of those instruments issued by REO.
It owes its banks around €2 billion and in June said it would not be in a position to repay a €450 million debt due in May 2011. It hired advisers to help it tackle this issue.
The company bought Battersea power station on the south bank of the Thames in London at the end of 2006 for €600 million. It borrowed some of the cash used from Bank of Ireland, which transferred the debt to Nama earlier this year.
Treasury China trust agrees deal with trio group
TREASURY CHINA Trust (TCT), which is 40 per cent owned by Treasury Holdings, has announced it has agreed a strategic partnership with Trio Group to expand its presence in China.
Chief executive Richard David said further announcements were expected in the coming months.
The new deal will see TCT take over a majority equity and managerial control of invested projects, focusing on commercial properties. TCT will be involved in overseeing all design, development and asset management functions, and provide technology and systems transfers to Trio.
TCT was known as China Real Estate Opportunities (CREO) and was listed in London. Earlier this year, the company delisted from London and transferred to the Singapore market.
Earlier this year, CREO sold an interest in a development in Tangdao Bay in Qingdao for £34 million sterling and returned £15 million of the proceeds from the sale to shareholders through an equity buyback.
Trio Group is focused on real estate, hi-tech industry, consulting and the motor industry.
