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Friday, 25 April 2014

The Gherkin goes into receivership

The famous London landmark (built in 2004) is likely to be auctioned off as the building was placed into receivership earlier this week.

The skyscraper, formerly known as 30 St Mary's Axe, is co-owned by the German company, IVG Immobilien, which became insolvent last year. During the recession, debt began to pile up due to high interest rates and changing currency value against the pound. Phil Bowers and Neville Khan of Deloitte were appointed receivers on Thursday by IVG's creditors to assist with the sale of the iconic building.

With the recovering market, it's believed a sale will take place within the next few months. The private equity firm co-owner, Evans Randall, had wanted to own more of the skyscraper but had been unable to agree a suitable solution with IVG due to the complex circumstances. Possible buyers now include, Ping An, a Chinese insurance company.

Joint Receiver, Neville Khan, stated, "The senior lenders were reluctant to appoint a Receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for over five years, and concerns that the borrowers’ lack of equity in the transaction had caused their incentives to become misaligned with the Lender".

"The Gherkin is a truly exceptional building, a landmark recognised around the globe. Our priority is to preserve the value of this asset".

"We are in the process of communicating with all tenants and working with the property manager to ensure the continuation of all property management services with no interruption to tenants."

The Gherkin was placed into receivership (relating to the Law of Property Act) which is the equivalent of having the building repossessed by its creditors, as IVG could no longer keep its stake of the building.

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