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http://www.smh.com.au/business/becton-develops-a-lower-debt-20100616-ygit.html

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Becton develops a lower debt PHILIP HOPKINS
June 17, 2010

BECTON Property Group has further cut its massive debt with the sale of a town centre development site in Melbourne to Woolworths for $31 million.

But investors in failed property groups Fincorp and Australian Capital Reserve, from whom Becton bought a range of assets in 2007 at heavy discounts, will have to wait for further payments. Fincorp investors received 50 in the dollar.

A Becton spokeswoman said funds paid to Fincorp or ACR were a separate schedule of payments from the paying down of debt. ''The two are unrelated,'' she said. A schedule of payments had been agreed to with noteholders, although asset sales also went towards that.

Becton chief executive Matthew Chun said the sale at Mernda in Melbourne's north-east enabled the company to cut debt. The proceeds were in line with the December 31 book value of the site, he said.

Becton has now paid down $1490 million in debt since the global financial crisis hit two years ago - $790 million in assets sold and $500 million from the funds management business.

The spokeswoman said Becton still had $950 million of debt in the whole group. Reducing debt was still the company's main strategy, she said.

Becton became caught with too much debt during the global financial crisis after buying up many properties. By the end of 2008, the company had more than 40 developments on the books, with a total value of more than $2.8 billion.

Becton's three key divisions now are retirement villages, affordable housing and property development, and funds management.

At Mernda, Woolworths has approval to develop a 40,000-square-metre town centre in several stages. Settlement of the sale includes Becton's involvement in the project as a development manager, subject to formal agreement.

Legal documentation of such an agreement is expected to be finalised within months.

Mr Chun said the Mernda sale provided the group with a chance to still deliver a high-quality project.

''It enables the group to potentially participate in the continued development of this project and earn future income streams from the development management work that will be required,'' he said.

Becton's shares closed marginally lower at 4.6.

Source: The Age
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