Fund managers acquire nearly half of struggling Becton Property Group

Fund managers have acquired nearly half of the debt-laden Becton Property Group, which has struggled since the onset of the GFC. 

Following Darren Olney-Fraser’s fund management business the Mariner Corporation acquiring a 20% stake yesterday, Sydney-based fund manager Telopea Capital has bought a 19.9% stake, while property investment firm and fund manager Titanium Property has acquired a 7% stake. 

The three firms acquired the shares that were held by PricewaterhouseCoopers, the liquidator of Australian Capital Reserve (ACR), a financing company that collapsed in 2007. 

The decision to snap up the shares is  expected to provide some support to Becton following reports last week in the Fairfax press that the company was at the mercy of its lender after revealing debts of $200 million and assets of just $800 million. 

The sale was made possible following an agreement with ACR liquidator Greg Hall of PricewaterhouseCoopers and Macquarie Bank over the weekend. 

Mariner acquired 1.47 million shares for $1 million, equating to a price of 68¢ per share as well as $1.56 million in options, which can be converted into shares at no cost by 2021. Taking up the share options would raise Mariner’s stake to 26.9%. 

Andrew Kerr, managing director of Telopea Capital, says Becton has been held back because half of its shares have been controlled by a liquidator and says the recent transactions would provide diversification to its shareholder base and provide it with partners with “experience in capital partnerships and the real estate development markets”. 

In a statement Becton said it believed it had “sound long-term fundamentals” and that Mariner believed it was “in a good position to continue to reduce its debt from its current development projects and rebuild the business through the next property cycle”. 

Becton is currently working on three residential development projects with forecast settlements worth $1.23 billion and six retirement village projects with forecast settlements of $177 million. 

Current projects include Divercity in Waterloo in Sydney’s eastern suburbs; a master-planned development in Newleaf, Bonnyrigg near Liverpool in Sydney’s outer west, and Liv in Kensington, the inner-Melbourne suburb north-west of the CBD. 

Last week Becton revealed that it had obtained an extension on its financing arrangements with Suncorp on a $2.2 million loan for projects in Wahroonga and Hervey Bay but had not been able to negotiate the refinancing of a $73 million retirement community loan with Suncorp.

Becton is currently undertaking a revaluation of its retirement assets in conjunction with the Oman Investment Fund in the hope of securing a short-term extension of debt facility with Suncorp. 

The results of the revaluation will be completed on June 30, the value of retirement assets is expected to be reduced by between $20 million and$30 million.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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