Phil Bowers and Neville Kahn of Deloitte have been appointed Joint Fixed Charge Receivers of 30 St Mary Axe, London also know as the Gherkin.
The building has been well leased since the initial default in 2009 and remains in trophy condition. The continuing defaults are due to the asset’s complex, multicurrency capital structure. Adverse interest rate and currency movements have caused the total senior liabilities secured by the property to increase materially
since closing.
IVG Immobilien AG, which controls the lead investor and asset manager, went into bankruptcy in 2013. IVG recently announced the sale of their Private Funds Management business to Deutsche Fonds Holding AG.
Neville Kahn, Joint Receiver and Restructuring Services Partner at Deloitte commented: “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 Lenders’.”
Mr Kahn continued: “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.”
A spokesperson for Evans Randall said:
“As widely reported previously, the default has arisen largely as a consequence of the IVG tranche of the loan being denominated in Swiss Francs and has been exacerbated by the insolvency at IVG. These factors have so far impeded Evans Randall’s ability to restructure the financing on the asset, including the injection of new equity. Evans Randall is adviser to single asset company Skyline Investments, which owns the Gherkin in a 50-50 partnership with IVG’s Euroselect 14 Fund. Evans Randall has equity ready to invest and has been unable to do so because of the inability to agree a consensual solution with IVG, given these uncertainties. We will be continuing the constructive discussions to date on a new financial structure. The Gherkin is a strong, well-let asset and one that we are firmly minded to continue our involvement in.”
Source: Deloitte/Evans Randall
