ºÃÉ«ÏÈÉúTV

Battersea power station is set to fall into the hands of administrators after banks demanded its owners pay back over £500m.

The owner of the iconic power station, Real Estate Opportunities which bought the building through subsidiary company Battersea Power Station Subsidiaries, has received demands from lenders for the return of £502m of credit facilities.

Bank of Scotland, acting for the National Asset Management Agency, and Lloyds bank have demanded the return of £324m of credit loaned to the company and Oriental Property Limited has demanded £178m.

Battersea Power Station Subsidiaries has confirmed it is not able to fulfil the payments.

ºÃÉ«ÏÈÉúTV’s sister title Property Week, reports that Ernst and Young are being lined up to be appointed administrators. A court hearing to confirm the appointment is due to take place on 12 December.

However, a sale of the site is still in discussion and may yet allow the company to avoid entering administration.

The site has planning permission for a huge development of residential and commercial space with an anticipated cost of £5.5bn and masterplanned by architect Rafael Vinoly. The plans include 3,400 new homes and 10 million ft² of commercial space.

British Land, Blackstone, Capital & Counties and Chelsea Football Club - through Mike Hussey’s Almacantar - have all previously shown interest in the long derelict site but other buyers are expected to come forward once the banks open an open market sale of the site.

Full statement from Real Estate Opportunities:

The Company announces that certain subsidiaries (BPS Subsidiaries) of Battersea Power Station Shareholder Vehicle Limited, the holding company of Battersea Power Station formed for the purposes of the restructuring that was announced in April 2011 and which is 54% owned by the Company, have received demand for repayment from Bank of Scotland plc, as agent for the National Asset Management Agency (NAMA) and Lloyds Banking Group the (together the senior lenders), under the senior facilities advanced in respect of the Battersea Power Station site, aggregating approximately £324m, and from Oriental Property Limited under the facilities advanced by it to the BPS Subsidiaries, aggregating approximately £178m. The BPS Subsidiaries are currently not in a position to satisfy these demands for repayment.  The Company has also been advised that NAMA  and Lloyds Banking Group have applied to the English court for the appointment of administrators to certain of the BPS  Subsidiaries and that a hearing for this purpose is to be held on 12 December 2011.

The Company remains in discussions which may result in the disposal of the group’s interest in the Battersea Powerstation site and repayment of associated liabilities.  However, there is no certainty that any such transaction will be effected.

The Company’s other assets, which are situated in Ireland, are unaffected by the above developments. The Company has recently received term sheets from NAMA, the principal lender in respect of its Irish assets, indicating NAMA’s continued support for the Company’s business in Ireland.