Germany real estate company IVG Immobilien, which co-owns the 40-storey tower at 30 St Mary Axe with private equity firm Evans Randall, filed for insolvency last year.
Evans Randall had said it was willing to buy a bigger stake in the iconic tower, but it had been unable to agree a new ownership plan with IVG.
The skyscraper was sold to IVG and Evans Randall in 2007 for £600m. The value of the loan to the co-owners has increased by more than 60% since the skyscraper was bought, and as much of the loan was in Swiss francs, the amount owed increased from £396m to circa £645m today.
"Adverse interest rate and currency movements" added to the building's debt burden, said Deloitte.The building had been in defalt for years after first breaching its loan-to-value ratio cap of 67% in 2009. The current ratio is above 90%.
“The senior lenders were reluctant to appoint a receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for over five years, and concerns that the borrowers’ lack of equity in the transaction had caused their incentives to become misaligned with the lenders,” said Neville Kahn, joint receiver and restructuring services partner at Deloitte.
It is considered likely that the building will be put up for sale within the next six months.