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Weekly News

Arabian knights circle Battersea

Power station developer in talks with MerchantBridge over cash injection

04.08.2006

MerchantBridge, a Middle east private equity group, is in advanced talks with Battersea Power Station owner Parkview International to take a substantial stake in the 2bn scheme.

MerchantBridge is the latest in a long line of investors to have courted Victor Hwang’s Parkview.

But insiders say talks with MerchantBridge have progressed over the last two months, that the group is now in due diligence and heads of terms are to be agreed in the next two weeks.

Set up in 1997 as Safron, Sloane Street-based MerchantBridge describes itself as ‘the first private equity fund to focus on the Middle East’. It has offices in Riyadh, Dubai and Baghdad, and a holding company in Luxembourg.

It describes ‘direct investment and real estate’ as being among its core activities, along with corporate and project finance and capital raising and privatisation.

Ian Rumgay, communications director, would not confirm or deny whom Parkview is in talks with, but said: ‘We are well advanced with one party and there are six parties that we have been talking to.’

MerchantBridge finance director Paul Ainscough also declined to comment.

Property Week understands that a MerchantBridge-assembled consortium is in talks to take a stake of up to 50% in the Power Station project. The site’s value ranges from 150m to 500m, according to different experts.

If a deal is reached, work on a first residential element, the west hotel and parts of the retail would start early next year.

It would also end a period of turmoil. On Monday this week Hwang confirmed his family had taken control of the scheme and removed its management team.

As Property Week revealed (news, 28.07.06), chief executive Michael Roberts and chief financial officer Michael Russell have left Parkview and the Hwang family has assumed direct control. Roberts, Russell and Swinney would not comment.

This week Parkview president and executive director Hwang announced that his son, Leo, has become vice-president and daughter, Vicky, is director of leasing. He also appointed former Chelsfield, Land Securities and Bovis director John Anderson, who had been at Parkview on a consultant basis, as development director.

Parkview found itself in a catch-22 situation when it could not secure funding.

It had lined up backing from Royal Bank of Scotland and Barclays for the redevelopment. But the banks would only commit more money if tenants signed up to the scheme.

While Parkview agreed head of terms with up to 20 retailers, none would sign without a guaranteed opening date.

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