Canary Wharf creditors wave through rescue deal: Digging for Jubilee Line extension should start before year end

CREDITORS of Olympia & York's Canary Wharf development in London Docklands voted unanimously in favour of a pounds 1.1bn rescue package yesterday. Canary Wharf is set to emerge from administration at the end of the month and the pounds 1.8bn Jubilee Line extension should get the go-ahead soon afterwards.

The 'yes' vote clears the way for the administrators to sign an agreement with London Regional Transport over the Jubilee extension in the next week or so. This will have to be confirmed by the Secretary of State for Transport when Canary Wharf officially emerges from administration, on 31 October. Digging should then start before the end of the year, with completion pencilled in for 1998.

The 10 banks that control Canary Wharf were 'relieved' the 1,400 unsecured creditors, mostly construction companies, had given their backing to the deal.

There will now be a 28-day 'cooling off' period during which creditors can lodge further claims with the court supervising the deal. But the banks are cautiously optimistic that, with 90 per cent of claims already agreed, there should be no further stumbling blocks.

The unsecured creditors will receive up to 15p in the pound under the deal. A further 25p in the pound will be paid to 130 construction trade creditors who will be required to provide warranties on work they have done already.

Administrators Stephen Adamson, Nigel Hamilton and Alan Bloom were appointed to run the development and construct a rescue plan on 28 May 1993. They will apply to the courts to be discharged from the administration, the biggest in British history, in the next few days.

Mr Adamson said: 'After protracted and complex negotiations with numerous parties we believe this is the best deal for the unsecured creditors who would otherwise have received nothing.'

The deal leaves 10 banks, led by Lloyds, as owners of Canary Wharf, under the guise of a new holding company, Sylvester Investments. A new trading company, Canary Wharf Ltd, will continue to build the development, and two senior executives are set to be appointed to run it. One is Sir Peter Levene, the former head of procurement at the Ministry of Defence who is now heading the Docklands Light Railway, and the other is Charles Sanderson, a director of Savills, the property agents.

Two new tenants for Canary Wharf have agreed to move in, on the condition that it successfully leaves administration. Mirror Group Newspapers and London Underground's engineering staff are both ready to move in the autumn and new year, bringing the occupancy rate of the massive office scheme up to 50 per cent.

(Photograph omitted)