Songbird wins founder stake

Canary Wharf founder Paul Reichmann has dumped his stake in Canary Wharf, marking the end of his 22-year chaotic involvement with the Docklands site.<br /><br />Songbird Estates on Friday said that it had upped its shareholding from 60.8 per cent to 69.3 per cent. <br /><br />Reichmann originally owned the stake, but Songbird purchased it from Commerzbank after the Canadian entrepreneur pledged it as collateral against loans from Dresdner. Dresdner was taken over by Commerzbank earlier this year.<br /><br />Reichmann, now set for retirement, kicked off the development of the financial hub after brokering a deal with the then Prime Minister Margaret Thatcher in 1987. <br /><br />But despite Reichmann betting that the Wharf could survive the 1990s slump, his firm Olympia &amp; York, one of the largest developers of commercial real estate in the world, was dragged to its knees due to the area&rsquo;s struggle to attract tenants.<br /><br />He later claimed back ownership, reacquiring Canary Wharf from the banks in 1995 and floating the business a couple of years later. In 2004 the Songbird consortium, which included entrepreneur Simon Glick, Morgan Stanley, and British Land, acquired a controlling stake in the asset for &pound;1.9bn, effectively kicking Reichmann out.<br /><br />Songbird has been surrounded by concerns during the property slump that it may breach its covenants on a &pound;800m Citi loan. But this week the group is set to launch a fully underwritten &pound;825m rights issue, which will rescue the group and leave it virtually debt free.