Planning Application and Restructuring Update (6036Y)

TIDMREOP TIDMREO

RNS Number : 6036Y

REO Securities Limited

24 December 2010

Real Estate Opportunities plc (the "Company", "REO")

Mayor's Approval of the Battersea Power Station Planning Application

and Update on Restructuring

24 December 2010

The Company is pleased to announce that the Mayor of London has approved the planning application for the redevelopment of the Battersea Power Station site. The Mayor's approval of the planning application represents another major step towards realising the vision for the redevelopment of Battersea Power Station. The planning application is now with the Secretary of State for Communities and Local Government for consideration. The Company will provide a further update on the planning process in due course.

In view of the time that has elapsed since the Company first indicated its intention to implement a financial restructuring, the Company believes it appropriate to update shareholders on the status of its discussions with creditors and the terms upon which, subject to approval by creditors, the restructuring may proceed. Negotiations with creditors have progressed well and are ongoing. Were the restructuring to be approved by creditors and to proceed on the terms discussed with creditors, the restructuring would comprise the following key elements:

-- Battersea Power Station would be transferred by REO to a new holding company. The demerger of Battersea Power Station is intended to facilitate the successful conclusion of the Company's global third party investment road show through which it is seeking to attract a long term equity partner into the demerged vehicle.

-- The Company would effect debt for equity swaps with the holders of the 7.5% convertible unsecured loan stock ("CULS") and zero dividend preference shares ("ZDPs"). CULS holders would receive 21.2% of the equity in the new Battersea Power Station holding company and 15.9% of the enlarged equity of REO. ZDP holders would receive 12.1% of the equity in the new holding company and 9.1% of the enlarged equity of REO. In addition, CULS and ZDP holders would be issued with warrants representing 15.9% and 9.1% respectively of the initial issued share capital of the new holding company. Each warrant would entitle the holder to subscribe for one new ordinary share at an exercise price of 0.001p at any time for up to 15 years after the completion of the restructuring if the equity in the new holding company has a value in excess of GBP510 million.

-- Ordinary shareholders (including Treasury Holdings) would receive 5% of the equity in the new holding company and warrants in respect of a further 5% and would, after the issue of ordinary shares to CULS and ZDP holders, retain 75% of the enlarged equity of REO.

-- As an incentive to manage the development of Battersea Power Station, Treasury Holdings would be awarded a management fee representing 7.7% of the equity in the new holding company.

-- The remaining equity in the new holding company, amounting to approximately 54%, would be retained by REO and its subsidiaries following the equitisation of various intercompany balances owed by companies in the Battersea Power Station group.

-- REO would be released from various financial obligations relating to the Battersea Power Station group, including guarantees of senior facilities and the GBP150 million loan note issued to Oriental Property Limited.

-- If the GBP150 million loan note and accrued interest is not repaid on 31 May 2011, Oriental Property Limited would, subject to certain exceptions, have the option to convert the debt into 75% of the equity in the new Battersea Power Station holding company. Shareholders in the new holding company would have the right to acquire that interest prior to 1 June 2012 for an amount equal to the sum due to Oriental Property Limited under the loan note together with interest.

A further announcement will be made in due course.

This information is provided by RNS

The company news service from the London Stock Exchange

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