Real Estate Opportunities said it is looking at demerging London's Battersea Power Station, as it reported losses of almost £1 billion sterling.
The landmark building in London has been derelict for over a quarter of a century and is in need of financing for redevelopment. REO said it had agreed new lending terms for Battersea with Lloyds Banking Group and the National Asset Management Agency.
The company said it would launch a roadshow to attract a long-term equity partner into the project ahead of the expected receipt of planning permission for redevelopment, and that it hoped to list the project before the end of the year.
'Due to the quality of the development, the location and the strengthening real estate investment market in London, interest has been very encouraging and we hope to announce significant progress in this regard later in the year,' REO said in a statement.
The company said it made an underlying pre-tax loss of £929m for the 14 months to the end of February. This reflected an £811m fall in valuation due to the falling property market in Ireland, where REO has extensive holdings.
REO said its loans with banks taking part in NAMA have been transferred and a business plan has been submitted to NAMA and is being reviewed. NAMA has acquired group loans amounting to £815m from the participating banks.
The company said it believes the operations of NAMA will over time improve conditions in the Irish property market and will lead to the introduction of much needed liquidity.
REO said it had cash holdings of £39m by the end of the year. This has since been boosted by £28m from the sale of shares in China Real Estate Opportunities in March.
'It has been an exceptionally challenging period for the company, as unprecedented conditions in the UK and Ireland impacted real estate valuations, and credit and liquidity remained very limited', said Chairman Ray Horney.
'However, the company has worked hard and is confident that it will be able to strengthen the balance sheet. Whilst uncertainty remains with regard to the economic outlook, the board remains confident that the quality of the company's portfolio and the experience and commitment of management will ensure the company is on a sold footing as markets recovery', he added.
