Malaysian state-backed funds 'looking for a loan for London-property project'

Kuala Lumpur

TWO Malaysian state-backed funds that acquired London's Battersea Power Station building are sounding out banks for a loan of about £1.5 billion (S$2.7 billion), people with knowledge of the matter said on Wednesday.

Malaysia's Employees Provident Fund (EPF) and state-owned asset manager Permodalan Nasional Berhad (PNB) are expected to hire banks shortly, according to the people, who asked not to be identified as the proceedings are private.

The funds will refinance existing borrowings and complete the purchase of commercial assets being developed under the second phase of the Battersea Power Station project, these sources said.

EPF and PNB said in January they planned to spend about £1.6 billion on the acquisition, which will give them ownership in a residential and office development where Apple plans to have its UK headquarters.

An EPF representative declined to comment. PNB said due diligence is ongoing, and it was premature to comment on the loan.

The Battersea Power Station building is about halfway through a comprehensive reconstruction that will be completed in late 2020, said the January statement.

The work, which is the largest historic building development undertaken in the UK, is part of a wider 17-ha mixed-use project.

The power station gained worldwide recognition after being used as the iconic cover illustration for rock band Pink Floyd's platinum 1977 album, Animals. It was depicted on the cover with a pig floating between two of its four chimneys. BLOOMBERG