Shard bankers give Halabi 10 days to sell

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The Independent Online

The banks behind The Shard skyscraper have given Simon Halabi 10 days to sell out his one-third holding in the project, according to a key partner in the development to build Europe's tallest building.

Sten Mortstedt, the executive chairman of CLS, a partner on the project, said: "The banks don't want to have him in. He has got an offer from a third party to buy his shares, and he must decide within 10 days whether to accept."

Mr Mortstedt would not elaborate on the motivation for the possible deal, but the Syrian-born property billionaire and his partners CLS and Sellar Property Group have long had a touchy relationship and have clashed in the past. Last year they went to court in a dispute over the size of the Halabi family trust's stake in the venture. He squabbled with Sellar again this year over management fees. That dispute was settled in arbitration.

When asked whether he would like Mr Halabi, to continue in the development of the 72-storey tower at London Bridge, Mr Morstedt said: "I prefer another partner." He declined to name the third-party bidder. The Halabi family trust declined to comment.

CLS revealed in its interim results yesterday that the financing of the £400m project had been hit by the global credit crunch. It said that funding talks "are at an advanced stage but have, unfortunately, been affected by the recent adverse credit markets".

Mr Mortstedt said that the possible delay was more to do with the uncertainty of Mr Halabi's position.

The Halabi Family Trust owns a third of the project. CLS and Sellar Property Group own the remaining equal shares.

For Mr Halabi, this is the second major deal to run into turbulence in as many months. Last month the holding companies for Esporta, the fitness chain, went into administration. Mr Halabi had bought the company less than a year before for £470m, and is expected to lose up to £150m when the administrator sells it.

The Shard is expected to open in mid-2011. The next step on the project – the demolition of Southwark Towers – was supposed to begin in the third quarter of this year. CLS said that it "will not commence any major development works until the loan finance has been secured".

CLS shares fell more than eight per cent on the news, which was accompanied by a disappointing set of results. Profits before tax dropped 44 per cent to £31.9m for the first six months of the year. It took advantage of the downswing to buy back 20,000 shares.

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