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Friday, June 8, 2012

SP Setia, Sime Darby are preferred bidders for Battersea Power Station

PETALING JAYA: Malaysian property giants SP Setia Bhd and Sime Darby Property Bhd are now the preferred bidders for the highly-coveted Battersea Power Station in London.

They have outbid rivals from parties such as Russian tycoon Roman Abramovich, whose Chelsea football club is located on the other side of the river.

SP Setia and Sime Darby Property's joint bid is RM1.96bil (£400mil) to redevelop the 15.7ha prized property.

Both companies have entered into an exclusivity agreement with the vendors of the property, under which they will have 28 days to conduct contract negotiations and due diligence. During this period, the vendors will not entertain any other bid.

Speaking to The Star on the sidelines of the Ernst & Young World Entrepreneur Of The Year award in Monte Carlo, Monaco, SP Setia president and chief executive officer Tan Sri Liew Kee Sin said the project would have a gross development value of £8bil (RM40bil) with both firms in a 50:50 joint venture.

Despite the hefty price, both SP Setia and Sime Darby Property are said to be comfortable with the project's potential returns and gross development value due to its prime location along the Thames river.

“The project is part of our ambition to be a real multinational corporation. With the combination of us and Sime Darby, we have a good chance of succeeding,” Liew said.

It is understood that the Malaysian bid was chosen not only for its attractive pricing but also its development plans as well as ability to fund it.

The Star had earlier reported that the Employees Provident Fund (EPF) might likely emerge as a partner to the SP Setia-Sime Darby Property joint venture and those familiar with the situation said its participation could come at a later stage.

Liew said “the idea was to use the power station as a symbol of regeneration” for London.

The power station is a famed part of London's skyline and was used as cover shots on Pink Floyd's 1977 album Animals and The Beatles' 1965 movie Help!

Its cultural influence has led the British government to list it as a Grade II status building, meaning “particularly important building of more than special interest”.

SP Setia and Sime Darby Property have pledged to preserve the iconic facade of the Battersea power plant, which was built in the 1930s and closed in 1983.

In a joint statement yesterday, the two firms said they had committed to the construction of a new underground station as part of the proposed extension of the Northern Line (part of the London Under-ground's Tube network), which shall pass by the site.

By The Star

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