MR John Beckwith who, with his brother Peter, sold British property group London & Edinburgh, Trust (LET) in 1990 for £491 million sterling, is the private investor behind the proposed restructuring of financially strained Power Corporation. He has signed heads of agreement with the syndicate of banks owed £190 million and with Power Corporation, according to informed sources.
Mr John Beckwith wants to get as hare quotation for his privately owned commercial property company, Portfolio, by backing it into Power.
Mr Charles Graham, a director of Pacific Investments, the holding company which owns Mr Beckwith's investments, including Portfolio (there are outside minority shareholders), told The Irish Times that he could make no comment because of "confidentiality agreements". However, he conceded that Pacific was interested in seeking a share quotation for Portfolio.
A spokeswoman for Power said the company was not able to make any comment.
Mr Beckwith, who has major international institutional shareholders in a number of his private companies, has been talking to institutional investors in London over the past few weeks, the sources said, is understood to involve an injection of around £20 million. Under the deal, Mr Beckwith and the institutions would end up controlling the revamped group.
Power is attractive to Mr Beckwith because it has a full London (and Dublin) listing, tax losses of some £70 million and a concentrated retail property portfolio, the sources said.
The share quotation was suspended, at 1.5p a share, last October, pending the outcome of the restructuring negotiations. The Power directors sought the suspension because the company was unable to release its annual report and accounts for the year to March 31st, 1995, by September 30th, as required by the Stock Exchange rules. The company is understood to be still targeting the end of this month for publication of the results.
A statement on the restructuring deal had been expected before now. A delay in the completion of documentation is understood to have caused the hold up. The Beckwith brothers built up LET in the 1970s and 1980s into a major property company before selling it to Swedish investors. They each made a profit of £40 million from the transaction. Since then, Mr John Beckwith has been operating separately from his brother and has concentrated on commercial property. His operations, apart from Portfolio, are now involved in the management of unit trusts and specialised property funds, and the provision of finance. These operations, in conjunction with major international institutions, are carried out through Beckwith Capital Markets, Beckwith Asset Management, River and Mercantile Investment Management, Beckwith Property Fund Management and the recently established Property Mezzanine Fund.
Pacific has a minority interest in a firm called Riverside which owns a number of British health clubs. Mr Peter Beckwith is understood to own a majority stake in Riverside.
Portfolio was set up three years ago and is involved in a number of British properties. It is relatively small, with gross assets of up to £40 million sterling.
The syndicate of 12 banks which are owed £190 million by Power is led by Irish Intercontinental. Around £90 million of the bank debt is secured against individual properties and this does not form part of the restructuring. Under the heads of agreement, the unsecured creditor banks, which are owed around £100 million, have agreed to a write down of some 50 per cent. Partially to compensate them for the write off, these banks will be able to convert a nominal amount of the write down into new Powershares.
Power owns just a dozen properties, located in Ireland (Powerscourt Townhouse Centre in Dublin is the main one), Britain and the US. Its last published accounts were for the six months to the end of September 1994. These showed a pre tax loss of £5.6 million, a loss per share of 4.85p and net tangible assets of £9.2 million. However, since then, the book value of the properties has been sharply reduced, leading to a deficit in shareholders funds.
