Stalled Silken hotel bought by main creditor

The stalled Foster + Partners Silken hotel in London has been bought by the same bank that put it into administration.

The development's main creditor Banco Bilbao Vizcaya Argentaria (BBVA) placed the 173-bedroom project in administration in July after developer Urvasco ran into financial difficulty. Pricewaterhouse Coopers was appointed as receiver.

After going into administration in July, it is believed the scheme was put on the market for at least £110m in October.

Now a subsidiary of BBVA has bought the development after the leading bidder, a Middle Eastern consortium pulled out.

It is not clear at this stage whether main contractor Cantillon will remain on the scheme.

The bank is understood to have received around 150 expressions of interest from potential buyers, believed to include investors, developers and hotel operators from Asia and Russia.

A statement released by PwC said: “Following the appointment of PwC as fixed charge receivers to the property last year, a period of extensive marketing was undertaken by Cushman & Wakefield and a number of bids were received by the deadline in November. Of the 12 bids, only three were at, or above, the minimum sales price of £110,000,000.

“The leading bidder was eventually unable to fund their purchase and, at the last moment before exchange, reduced its bid to figure below the minimum sales price. The third placed bidder required stapled debt from the original lending bank, BBVA, in order to fund its purchase, which was not in compliance with the sales process stipulations and was therefore an invalid bid. The bidder consequently reduced its bid to a figure well below the minimum sales price.

Real estate specialist partner at PwC and one of the appointed receivers, Barry Gilbertson, added: "These bid reductions left the field open for the one remaining bidder who had bid at or over the minimum sales price. On December 29th, a sale was simultaneously exchanged and completed to the second bidder, a subsidiary of BBVA, for a sum significantly in excess of the minimum sales price."