LONDON Private equity firm Benson Elliot Capital Management said it and developer Stanhope have taken a majority interest in property tycoon John Madejski's 400-million-pound commercial development in Reading, west of London.
The parties declined to say how big the stake was or how much the deal was worth.
Madejski's Sackville Properties had been looking for a funding and development partner to invest in the Station Hill 1.7 million square foot, mixed-use development, Benson Elliot said in a statement on Tuesday.
The site is next to Reading Station which is undergoing a 850 million pound upgrade as part of plans to redevelop the heart of the town.
English businessman Madejski, who has a range of commercial holdings from property to publishing, has a number of investments in the Reading area, including ownership of the Reading Football Club. The Sunday Times 2010 Rich List put him in 309th place with a worth of 200 million pounds.
Funds from the deal will be used pay back some of Sackville Property's debt after the breach of a finance agreement with Lloyds Banking Group, however Lloyds will see a loss on the former HBOS debt, the Financial Times said, citing people familiar with the matter.
A spokesman for Benson Elliot declined to comment on use of the funds.
(Reporting by Karen Foster; Editing by Louise Heavens)