Reichmann loses last shares in Canary Wharf
Monday 21 September 2009
Paul Reichmann, the founder of London's Canary Wharf, has lost his last shares in the financial district, drawing to a close his 22 year association with the Dockland's location.
Mr Reichmann twice lost control of the site after first brokering a deal with the then Prime Minister, Margaret Thatcher, to develop the area in 1987. His holding in the company behind Canary Wharf disappeared on Friday when the German bank Commerzbank sold its stake in the group to Songbird Estates. Commerzbank's 8.45 per cent stake originally belonged to Mr Reichmann but was called in by the bank after Mr Reichmann pledged the stock as collateral against loans from Dresdner. Dresdner was bought by Commerzbank earlier this year.
Mr Reichmann originally ran the project through his development group Olympia & York, which went bankrupt in 1992 after Canary Wharf failed to attract sufficient tenants.
The bank owners of the site then sold the site back to Mr Reichmann in 1995, when he floated the company, before losing control again in 2004 when Songbird Estates acquired a majority stake.
Songbird, which announced an emergency cash call last month in order to stave off administration, bought Commerzbank's stake after the extending the size of the rights issue, and arranging a loan from its biggest shareholders.
After the acquisition of Commerzbank's stake, Songbird Estates now owns 69.3 per cent of Canary Wharf. Songbird's biggest backers – Qatar Holding, China Investments Corporation, Morgan Stanley Real Estate and GF Investments II – agreed to back an extension to the rights issue.
The proceeds of the cash call, initially intended to be £825m to repay all of an outstanding loan owed to Citibank, will now also partly finance the buyout of Commerzbank's Canary Wharf shares.
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