BECTON Property Group is again at the mercy of its lenders, barely a year after shareholders approved a drastic restructuring.
The Melbourne-based property developer, which had net assets of less than $800,000 and debt of $200 million at the end of December, revealed yesterday it was struggling to refinance one loan from Suncorp, and faced a write-down of up to $30 million on its retirement village assets.
That revaluation is also likely to put it in breach of loan covenants on its $120 million of borrowings from its major, and most supportive, banker BOS International.
If that were not enough, control of the company could change hands within days because the 49.9 per cent of the company's stapled securities, held by the liquidator of the collapsed Australian Capital Reserve, appear to be on the market.
Becton's arrangements with BOS International, these days a subsidiary of Lloyds International, include a condition that Becton's current management stay in place. That deal is believed to include chairman Bill Conn, and chief executive Matthew Chun.
Becton, formed in 1976 and with $4 billion worth of projects completed over this period, issued two ASX statements yesterday to clarify what was happening with its loans and securities.
Becton said it could not confirm the details of any transaction, or the extent to which it may affect control of the company. "No one has approached us about organising a meeting," Mr Chun, told BusinessDay.
Mariner Corporation, which itself had to be rescued from financial collapse in 2010, is reportedly negotiating to buy at least part of the ACR stake. ACR's liquidator, Greg Hall of PricewaterhouseCoopers, is understood to be selling its Becton stake through Macquarie Bank.
Mariner Corp can only buy up to 20 per cent of Becton's stapled securities without either shareholder approval or launching a takeover.
However, ACR's stake also includes options that if exercised would increase its stake to 67.3 per cent of Becton.
ACR's controlling holding in Becton was the result of a major restructuring of the company last year, designed to avert administrators being appointed.
That deal, which included consolidating its securities on a 1-for-200 basis, watered down existing investors' holdings to less than 15 per cent of the company.
Becton also announced yesterday that it had been unable to reach agreement with Suncorp on a medium-term extension to its $73.6 million Retirement Alliance debt, which matures on July 31.
Together with its joint venture partner, Oman Investment Fund, it is now negotiating a short-term extension of this debt. Suncorp did grant a short-term extension to July 31 of as $2.2 million debt on its Hervey Bay and Wahroonga project.
The debt renegotiations triggered the revaluation of Becton's retirement assets.
Mr Chun said Becton had two big projects in the development pipeline in NSW that would deliver more than $1 billion over the next 10-12 years.
It was the continuing income from these projects that guaranteed the support from the banks, he said.