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" with its new creditors broke down in the wake of Becton's shares entering a trading halt on Friday.
Becton representatives and receivers KordaMentha have stressed the "limited" nature of the receivership, stating that business operations are set to continue, development projects will be finished and staff will receive all due pay and entitlements. The retirement division will reportedly not be affected.
But they have acknowledged that shareholders, including major investors Mariner Corporation, Titanium Property Investment and Telopea Capital Partners, are likely to be wiped out.
The appointment of receivers comes after 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," a statement released to the ASX said.
Becton chief executive Matthew Chun declined to comment on the negotiations with Goldman and Fortress, saying only that that Becton had "explored every solution possible".
"It's obviously extremely disappointing for our long-held security holders who have been working and supporting this business for a long period of time, through some pretty challenging times," he 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."
But Mr Korda warned that the receivers would not be funding any extraordinary general meetings or legal fights between shareholders.
The move has already sparked fierce criticism from some of Becton's major investors 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."