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Australian Social Infrastructure Fund sells 7m Australian Education units
Published 4:51 PM, 30 May 2011

Source: News Bites



Australian Education Trust responsible entity Australian Social Infrastructure Fund (ASIF) has sold 7 million Australian Education Trust units at 80c each for $5.6 million and 252,312 Becton notes at an average price of 25c per note for $600,000.

The combined proceeds of $5.66 million will be applied to reduce debt.

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Becton buffeted by slower demand
PUBLISHED : 22 JUN 2011 00:05:31 | UPDATED: 22 JUN 2011 07:04:48

Ben Hurley


Listed developer Becton says demand has slowed for Sydney apartments as it submits plans for the second stage of its Divercity development in Waterloo, in the city's inner south.

Matthew Chun, chief executive of the troubled company, said buyers were more cautious this year despite strong pre-sales achieved for the project's first stage.

"It's levelled off somewhat this year - it's certainly not as strong in 2011 for a whole range of reasons," Mr Chun said. "There is a generally more cautious behaviour from the consumer due to natural disasters and continued economic shocks around the world.

"But there is still a very good level of demand and we see that continuing in Sydney for some time because of the imbalance of demand versus supply."

The company has already received deposits on all 278 apartments in the first stage, which were offered off the plan over March and April this year for an average price of $600,000. It is now under construction, complete with rooftop cinema and a teppanyaki bar.

The $121.5 million second and third towers will range in height from six to 12 storeys, with 359 residential apartments, 2012 square metres of retail and commercial floor space, parking for 368 vehicles and 158 bicycles and a public plaza.

Pre-sales started two weeks ago and Mr Chun said there was a good level of inquiry.

Stakeholders in the heavily indebted company last week voted through a recapitalisation program with Bank of Scotland involving a debt to equity conversion that would heavily dilute shareholders.

Mr Chun said the company planned to consolidate its pipeline this year, including 2300 affordable homes at Bonnyrigg in Sydney's western suburbs. Under the plan, 70 per cent would be built and sold back to government for social housing.

The company is also finishing the final stage of its Liv apartment project in Kensington, Melbourne, and will build another 200 aged care units over the next two years.

Housing finance commitments rose in March, according to the Australian Bureau of Statistics, after trending down since late last year. The biggest increase was for the purchase of new dwellings, which rose 8.9 per cent.

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Equity investors pay for Becton's rescue
PUBLISHED : 17 JUN 2011 00:37:15 | UPDATED: 17 JUN 2011 02:58:28

Gretchen Friemann


Stakeholders in the embattled Becton property group, one of the worst casualties of the credit crunch, yesterday voted through a recapitalisation program that will see existing equity investors heavily diluted.

Under the plan, Becton's largest creditor, Bank of Scotland International (BOSI), will convert $33 million in senior debt to equity with a further $32 million turned into subordinate debt.

Other lenders have also bought into the debt-for-equity swap.

The reorganisation, which has dragged on for more than nine months, and represents the last hurrah for the troubled developer, means BOSI will be left with about $95 million in senior loans.

Long-suffering unit holders, who have watched the company's value shrivel to $2.87 million since it listed five years ago with a market cap of $153 million, will be left with just 14 per cent of Becton following the recapitalisation.

However, a booklet issued to security holders prior to yesterday's meeting for note holders and security holders, warned this figure could wither again to 4.7 per cent if other stake holders exercise their options.

Failed property financier Australian Capital Reserve is among the creditors converting debt into equity.

Liquidators of ACR, which imploded in the financial crisis leaving 7000 retail investors out of pocket to the tune of $330 million, have agreed to accept a 50 per cent equity stake as well as $783.7 million in options in exchange for theur $39 million of unsecured debt.

Another cohort of small investors are behind $13.7 million in junior loans.

By green-lighting the capital stack reshuffle, BECG noteholders have traded a 50 per cent loss on the face value of their unsecured loans for a 36.2 per cent equity stake.

Becton securities are trading at 1.4� and the company has stated it will not recommence distributions for five years.

While investors in the developer, which has been stripped down to its bones in recent months after its fund management business was offloaded to 360 Capital, must stomach hefty losses, the recapitalisation may save BOSI's bacon.

The UK-based bank, advised by Fort Street, hopes to recoup its entire $156 million stake in Becton by propping up the ailing developer over the next five to 10 years. A source close to the negotiations said BOSI had concluded the recapitalisation offered "a better chance of a full payout than pulling the trigger on the company".

He said that the Waterloo residential project in Sydney's inner west, along with a clutch of property schemes aimed at the retiurement sector, would be crucial to its revival.

Under the recapitalisation plan the developer's loan to value ratios on the BOSI debt will shrink to 73.4 per cent from 121.7 per cent at the end of last year. The bank also has the right to appoint two directors the Becton board, although in the booklet to security holders, the developer said BOSI "had no current intention" to do so.

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