精东影视

精东影视, 20 March 1992

O&Y seeks to quash collapse rumours

Canary Wharf developer Olympia & York has taken a series of measures to reassure global capital markets. Rumours on Wall Street have twice suggested the group was near to collapse in the past few weeks. 

After prompting from O&Y, the Canadian credit rating agency Dominion Bond Rating Service last week reaffirmed its rating of publicly-traded O&Y securities as 鈥渋nvestment grade鈥� - an unusual step as the rating had been given only a few weeks before. O&Y also held a discreet conference with seven top Canadian securities dealers. 

But trading has almost ceased in bonds secured on O&Y鈥檚 Toronto skyscraper First Canadian Place. Potential buyers are understood to be worried by O&Y鈥檚 refusal to disclose the full extent of its borrowings, thought to exceed 拢11bn.

The private company is believed to be near to selling a stake in Home Oil of Calgary and is looking for buyers for stakes in the newsprint manufacturer Abitibi-

Price and the Gulf Canada Resources energy group.

精东影视, 27 March 1992

O&Y cash worries hit industry

Developer鈥檚 debts cast shadow over Jubilee Line and Canary Wharf

The financial struggles of developer Olympia & York have cast doubt on the final three phases of Canary Wharf and look set to delay the start of design work on the 拢1.3bn Jubilee Line which passes under the development.

This week it emerged that bankers are distancing themselves from the Canadian-based group鈥檚 pledge to pay a 拢400m contribution to the 16 km line which runs from Green Park to Stratford in east London. 

One banker is reported to have said: 鈥淥&Y鈥檚 made a commitment to the Government that it would fund the construction. But that had nothing to do with the banks.鈥� 

O&Y is due to pay 拢40m by 1 April, another 拢60m next March and the final 拢300m when the project is completed in late 1996. 

A meeting between O&Y and the Department of Transport last week failed to resolve the issue of when O&Y is to pay the first tranche of cash. This is likely to further delay the letting of building contracts. At present, London Transport has 220 staff working on the 12-station project.

On Tuesday, Tom Johnson, a former president of US bank Manufacturers Hanover was appointed president of O&Y Developments in a management shake-up which reduces the power of chief executive Paul Reichmann.

The move was forced on the company when it became clear that it had debts in excess of 拢12bn. These are now the subject of rescheduling talks. 

Reichmann is now to 鈥渇ocus on Canary Wharf鈥�, say the bankers. He said this week that he 鈥渞emained fully committed to the completion of the Canary Wharf Project鈥�. The 83,600m² phase two is still under construction. But there are grave doubts that the 1.29million square metres that makes up phase three, four and five will be started.

Also at risk is the adjacent 6 ha Heron Quays site and a proposed 3ha development at nearby Port East.

An O&Y spokeswoman refused to comment on the speculation. 鈥淢ichael Dennis [managing director of Canary Wharf] said last year that the rest of the building work will be down to market-led forces.鈥�

鈥淚t has gone absolutely dead,鈥� said one specialist firm working on the site who had been expecting more work.

Earlier this month O&Y failed in an attempt to raise 拢215m by way of an enterprise zone trust for a 600,000 m2 building on phase one.

Leader, 5 June, 1992

A vision and a victim

Canary Wharf, part one: let鈥檚 hear it for the Reichmann brothers. The pair have left the British construction industry a shining example of how to design, manage and construct. Canary Wharf may be a financial disaster, but it is a gleaming monument of awesome architecture raised at remarkable speed to amazing quality.

Those owed money might disagree, but the building industry owes O&Y a debt. In fact, two debts. First, imagine the fallout this week if Canary Wharf had been built to the same gimcrack standards of some of the surrounding blocks on the Isle of Dogs. The whole construction industry would have had its reputation blighted for a decade.

The second debt owed to O&Y is that the US-style management methods have given hundreds, if not thousands, of UK consultants and contractors a glimpse of a better way to build. O&Y may have been abrasive and heavy handed, but can anyone honestly say a UK client could have done a better job?

Canary Wharf, part two: let鈥檚 hear it for the Government. But this time a boo. It is expected of the Treasury to know the price of everything and the value of nothing. That is presumably why the DOE first refused to go to the Isle of Dogs. But what is not expected is the lack of leadership over moving civil servants to the Isle of Dogs.

A further disgrace is the Pilate-like attitude of the Prime Minister to the Jubilee line. It is a public-sector project with a 拢400m slice of private money, not a private line to a bankrupt

development. The benefits to the construction industry are immediate and substantial. The benefits to east London and those living near Canary Wharf and the four other brand-new stations proposed for the line are incalculable - even by the Treasury.

There are strong signs this week of a shocked Government taking positive action at last. Maybe just in time for Canary Wharf. But a little late for Paul and Albert Reichmann. 

精东影视, 5 June 1992

Builders stand to lose tens of millions

Olympia & York administrators lament 鈥檌ts very unfortunate鈥�. Adrian Barrick reports.

Dozens of contractors and subcontractors working on the 拢1.6bn Canary Wharf development in London Docklands were this week facing potentially crippling losses after developer Olympia & York slid into administration last Thursday.

One firm, Yorkshire-based Ward 精东影视 Systems, whose parent company is itself in administration, claims to be owed 拢400 000. Another, which. asked not to be named, said up to 拢1m was outstanding.

Work on the Canary Wharf project stopped at 10am last Thursday, and builders were asked to leave the site immediately. Redundancy notices were this week handed to 44 of O&Y鈥檚 400 employees. 

Administrator Ernst & Young now has three months to draw up rescue plans, which will be put to a creditors鈥� meeting.

Ernst & Young refused to confirm reports of vast debts to contractors saying it has not yet added up the claims though retentions are known to total 拢15m.

One contractor, itself owed 鈥渁 few million鈥� in unpaid bills, estimated that the total losses faced by builders could top 拢50m.

Consultants, contractors and subcontractors were this week sending their unpaid bills to the administrators. But Ernst & Young sources warn that there is little prospect of them being paid in full. Joint administrator Nigel Adamson said: 鈥淏uilders are creditors, and under the administration procedure their position is frozen. It is very unfortunate for them.鈥�

Of the main contractors at Canary Wharf, Bovis said it is owed money without specifying how much, but Trafalgar House said it has 鈥渧ery little outstanding鈥�. Mowlem declined to comment.

But Ken Anderson, chairman of Yorkshire-based Ward 精东影视 Systems, which installed structural steel on several buildings at Canary Wharf, said his unpaid bill of $400 000 was 鈥渁 hard knock to take鈥�. Anderson said the blow would not 鈥渢hreaten the business鈥�, which the administrator is trying to sell, but it will hit the sale price.

Martin Hatton, London region director of Hall Electrical, said his company was owed about 拢50,000 for work at Canary Wharf. Hall was last week bought by East Midlands Electricity, after calling in the administrators on 19 May. 

A spokesman for Kilmarnock-based specialist roofing contractor WB Watson said: 鈥淲e are owed 拢25 000 in retention money which was due to be paid this month. We can鈥檛 afford to suffer too many hits like that.鈥�

精东影视, 5 June 1992

O&Y quiet on debt

Olympia & York construction director Richard Griffiths told 精东影视 that he has 鈥渞ead with amusement some of the huge figures that have been quoted鈥� in the press for claims and retentions owed to builders.

Asked if his own job was safe, Griffiths said: 鈥淲ell, I answered the telephone, didn鈥檛 I?鈥�

However, he did not know if he would still be there in four weeks鈥� time.

精东影视, 5 June 1992

Hanson and P&O eye up the spoils

Administrators of Canary Wharf developer Olympia & York have just a month to attract new investors and clinch a deal with the Government to move civil servants into the development, or the 拢1.6bn project is unlikely to be saved. 

Conglomerates Hanson and P&O Group and the wealthiest man in Hong Kong, Li Ka-Shing, are all mentioned as possible rescuers for the London Docklands scheme.

A spokesman for P&O Group, which owns Bovis Construction, said: 鈥淲e are monitoring the situation closely.鈥� But City Sources doubt whether P&O could afford to buy Canary Wharf, let alone assume the cost of completing the project. 

Lord White of Hanson is reported to have a team working on Canary Wharf. But property Sources say Hanson may be preparing to bid for parts of the scheme if it goes into liquidation, rather than mount a rescue operation. 鈥淚 think they just want to keep their name in the frame,鈥� said one expert.

Hanson is understood to have told the Government that it would only be interested in Canary Wharf if the banks wrote off most of its 拢1.2bn debt, and if the Government was flexible over Olympia & York鈥檚 拢400m contribution for the Jubilee Line extension.

精东影视, 26 June 1992

Bovis and Mowlem terminate contracts

Contractors Bovis and Mowlem this week terminated their contracts at Canary Wharf in response to developer Olympia & York鈥檚 slide into administration two weeks ago.

The moves follow the announcement by administrator Ernst & Young that unsecured creditors of O&Y-including building consultants, contractors and subcontractors-are owed a total of 拢50m.

Bovis Construction, which was management contractor for an office building at 10 Cabot Square and the Cabot Place shops, is understood to be invoking a clause in its contract that allowed it to determine if O&Y became insolvent.

One Bovis subcontractor, which asked not to be named, said: 鈥淭his could be bad news for a lot of people. But it was a move we expected.鈥� 

Mowlem, which was management contractor for office buildings at 25 The North Colonnade and 20 Cabot Square, confirmed it was determining its contracts. 

Contractors at Canary Wharf have held regular meetings with Ernst & Young over the past week to discuss claims for unpaid bills.