FINANCE chiefs working with an investment vehicle backed by Irish property giants Johnny Ronan and partner Richard Barrett are remaining tight-lipped about China Real Estate Opportunities’ sudden shares suspension announcement last Friday.
A statement on the London Stock Exchange posted at 10am on December 8 simply read: “At the request of the company trading on AIM has been temporarily suspended pending an announcement.”
This is believed to be in relation to an acquisition – to follow on from Real Estate Opportunities’ announcement on November 30 that it had exchanged contracts on a £400 million deal to purchase Battersea Power Station from the Hong Kong-based Hwang Family’s wholly-owned Parkview International London Plc company.
The deal to snap up such an iconic London landmark is conditional on the approval by REO’s ordinary shareholders and Treasury Holdings, which controls 58.5% of ordinary shares in REO
REO’s Chinese arm – China Real Estate Opportunities (ChinaREO) – was established to acquire property for investment and/or development in China and began trading on the Alternative Investment Market (AIM) in December 2005. Shortly beforehand Johnny Ronan, joint owner of Dublin-based Treasury Holdings - which owns a majority of shares in REO and CREO – stepped down as a director of REO.
Corporate stockbroking firm Teather & Greenwood’s investment funds MD Paul Fincham: “There is nothing unusual about last week’s shares announcement but we are unable to say anything other than watch this space.”
The reason for the suspension – the type of which an AIM source said was “both neither entirely commonplace nor overtly unusual” – is due by the end of this week.
Two days before last Friday’s statement, Treasury Holdings – which has a property portfolio in excess of €2.1 billion – was announced as Real Estate Opportunities Limited’s new manager of the company’s assets.
An Extraordinary General Meeting has also been convened for December 29, at which resolutions to enable the acquisition of Battersea Power Station to proceed will be put to ordinary shareholders.
The December 6 statement by REO – which has about €1.3 billion in assets – added: “The Board has been considering the arrangements pursuant to which it is advised in relation to the Group’s assets, particularly having regard to the fact that the proportion of the Group’s assets represented by development properties has increased over time.
“This is now more pertinent given that the Battersea Power Station site will be a significant development asset of the Group requiring substantial development expertise.
“The Board has therefore determined to appoint Treasury Holdings to act as investment adviser for all of the Group’s property assets.”
It also announced that – except for retaining INVESCO Asset Management Ltd to manage the Income Portfolio and to provide advice to the independent directors from “time to time” – INVESCO would resign as the manager of the REO group’s assets.
The statement added: “The terms upon which Treasury Holdings will be appointed by the Company in respect of the Irish property portfolio substantially replicate the terms upon which Treasury Holdings is currently retained by INVESCO and the terms upon which Treasury Holdings will be appointed in respect of the non-Irish portfolio will again substantially replicate those terms.”