CORPORATE raider Darren Olney-Fraser has warned that apartment prices could plunge at housing projects and retirement villages owned by embattled Becton Property Group unless the company can broker a deal with lender Goldman Sachs.
Failure to strike a deal with Goldman Sachs - which last week bought the $200 million debt owed by Becton to Bank of Scotland International (BOSI) for just $100 million - could also see the future of New South Wales' $1.2 billion Bonnyrigg social housing project thrown into doubt.
Becton is the builder of the Bonnyrigg project in Sydney's western suburbs, where an 81-hectare state government-owned housing estate is being turned into 2433 dwellings.
Should Becton be put into receivership by Goldman Sachs, the construction company could be forced out of the project.
"If Becton and Goldman Sachs can work together, Becton can once again be a powerful player in property," Mr Olney-Fraser said. "If Goldman Sachs uses this deal with BOSI to put Becton into receivership, the project at Bonnyrigg will be adversely affected.
"This would have a big impact on the many families that Becton is helping in partnership with the NSW government."
Becton - once a giant of the Australian construction industry with a market capitalisation of more than $4 billion - now has just $300 million of assets on its books, $300 million of debt, and a market value of $3.4 million.
Those remaining assets include more than 1000 units in retirement villages in Melbourne and Sydney, valued at an estimated $150 million.
Key retirement village assets in Melbourne include Classic Residences of Brighton, Menzies Malvern and the Waverley Country Club in Rowville.
"History shows that if a retirement village falls into receivership, there is a major impact on unit values," Mr Olney-Fraser said. "No potential buyer wants the uncertainty of buying into a village that is controlled by a receiver, or has recently been in receivership."
Mr Olney-Fraser's company, Mariner, is the largest shareholder in Becton, with 18 per cent of the company's shares. On Monday, Mariner will seek shareholder approval to exercise options that will take its stake in Becton to 30 per cent.
Mr Olney-Fraser will also make a second attempt to join the board.
In November, Mariner chairman Donald Christie joined the board of Becton, but BOSI objected to Mr Olney-Fraser taking a second seat, stating that Mariner could exert too much control.
"Mariner wants two directors on the Becton board, and we won't stop until we get them on," Mr Olney-Fraser said. "We will convert our options to shares, taking Mariner's shareholding in Becton to about 30 per cent, making it the largest shareholder of Becton."
As the battle for control of Becton heats up, Mr Olney-Fraser has taken a swipe at the pay packet of Becton chief executive Matthew Chun.
"It's time for Matthew Chun to deliver something out of the BOSI debt sale for shareholders. He has done a great job keeping Becton alive post-GFC, but shareholders have been smashed along the way," he said. "Mr Chun's $1 million salary is about one-third of the company's market capitalisation, and I can't understand how the board can justify that."
Mr Chun said he was unable to comment on Mr Olney-Fraser's remarks as Becton was in the midst of a trading halt and due to make a statement to the ASX on Monday.
Frequently Asked Questions about this Article…
What risk does Becton Property Group's Bonnyrigg social housing project face?
The Bonnyrigg project — a $1.2 billion redevelopment of an 81-hectare NSW site into 2,433 dwellings — could be thrown into doubt if Becton is put into receivership by lender Goldman Sachs. If Becton were forced out, the future of the project and the families relying on it could be adversely affected.
Why did Goldman Sachs buy Becton’s debt and what could that mean for investors?
Goldman Sachs bought $200 million of debt owed by Becton to Bank of Scotland International (BOSI) for about $100 million. That move gives Goldman influence over Becton’s creditors; failure to agree a deal between Becton and Goldman could lead to receivership, which would be a material risk for shareholders and property investors tied to Becton projects.
How could receivership affect apartment prices and retirement village unit values?
According to corporate raider Darren Olney‑Fraser, if Becton or a retirement village falls into receivership there is typically a major negative impact on unit values. Potential buyers often avoid assets controlled by or recently in receivership, so apartment prices and retirement village values could plunge under that scenario.
What are Becton’s key financial figures mentioned in the article?
The article states Becton now has about $300 million of assets, roughly $300 million of debt and a market value of around $3.4 million. It also highlights more than 1,000 retirement village units valued at an estimated $150 million among its remaining assets.
Who is Mariner and how could Mariner’s moves affect Becton investors?
Mariner, led by Darren Olney‑Fraser, is Becton’s largest shareholder with an 18% stake. Mariner plans to seek shareholder approval to exercise options that would raise its holding to about 30% and is pushing for two directors on the Becton board. Those actions could change board control and strategy, so investors should watch Mariner’s votes and board appointments.
What board and governance developments should investors watch at Becton?
Investors should monitor Mariner’s planned shareholder vote to exercise options (which would increase its stake to ~30%), any new board appointments (Mariner wants two directors), and objections from creditors — BOSI previously objected to a second Mariner appointee. These governance moves could materially influence Becton’s direction.
What was said about Becton CEO Matthew Chun’s pay and shareholder reaction?
Darren Olney‑Fraser criticised CEO Matthew Chun’s $1 million salary, saying it is roughly one‑third of the company’s market capitalisation and arguing Chun needs to deliver results for shareholders. The article notes Chun was unable to comment because Becton was in a trading halt and due to make an ASX statement on Monday.
What immediate developments should everyday investors monitor regarding Becton Property Group?
Everyday investors should watch for official ASX announcements and the outcome of Mariner’s shareholder vote to exercise options, any updates on Becton’s negotiations with Goldman Sachs over the BOSI debt, potential receivership actions, and statements about the Bonnyrigg project and retirement village assets. Those events will drive near‑term risk and value implications for investors.
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