Developer Becton Property Group has been pushed into limited receivership after failing to meet at least $95 million worth of debt obligations to US investment bank Goldman Sachs and vulture fund Fortress Investment Group.
The move against the 36-year-old residential developer and retirement village operator came when "extensive negotiations" broke down in the wake of Becton's shares entering a trading halt on Friday.
Becton joint company secretary Jason Vanderzalm announced to the ASX that Goldman Sachs and Fortress refused to provide the debt waivers that were necessary to ensure the "future and ongoing solvency" of the group.
"Having exhausted all alternatives available to it, the Board therefore has no reasonable basis for believing [Becton] will be in a position to pay its debts as and when they fall due," the statement said.
KordaMentha have been appointed as receivers and managers for Becton Pty Ltd, Becton Group Holdings Pty Ltd and Becton Construction Group Nominees Pty Ltd.
“It is important to understand this is a very limited receivership which affects the ownership and control of Becton, but not the business operations,” Mark Korda said. “It will be business as usual in the development, construction and retirement operations.”
Mr Korda stressed that salaries and accrued employee entitlements will be paid as they come due.
The move has already sparked fierce criticism from some of Becton's major investors – Mariner Corporation, Titanium Property Investment and Telopea Capital Partners – who have been jockeying for control of the company ahead of a shareholder meeting next month.
Darren Olney-Fraser, Chief Executive Officer of Mariner Corporation said: “As an activist shareholder, Mariner fought hard with the banks on behalf of shareholders to try to save Becton. We will always fight for shareholders in these situations.”
This latest crisis for the once-great Melbourne developer was precipitated by Goldman Sachs and Fortress buying $242 million worth of corporate and project from bank of Scotland in early January.
A fortnight ago, Becton announced that it expected to post a net operating loss of between $2 million and $3 million for the half year. The forecast for the statutory net loss after tax is $10 million to $12 million.
WITH BEN BUTLER