Becton Property Group is in the process of implementing a number of initiatives to reduce the group’s debt and strengthen its capital structure in response to increasingly challenging market conditions.
The previously announced initiatives, which Becton hopes will reduce the gap between its underlying net asset value and the current market trading price, include a program to simplify the business, strengthen its balance sheets, including asset sales and overhead reduction, and further discussions in relation to recapitalisation and acquisition proposals for the group.
Becton said it is “actively pursuing” a business simplification program, which primarily involves the sale and settlement of apartments and land sites. In line with this, Becton will also significantly reduce the number of its development projects, managed funds and overheads.
Miche Paterson, a spokesperson for the company, said the reduction in overheads is a natural extension of the business simplification program. She said with a decrease in the number of development projects — the group aims to reduce the current total of 37 to approximately 10 — and a cut in the number of funds managed, required overheads will also fall. As current projects are finalised and development sites are sold, staff assigned to these projects will no longer continue with the group.
Becton reported an improvement in its capital position, including a significant improvement in its net debt and deferred payment obligations position over the past 12 months. It said investors will not receive an interim distribution in March 2009 in order to preserve capital, but the board will make an assessment on the payment of a final distribution mid-2009.
“Becton has made significant headway in improving its overall capital position, including in reducing its debt obligations, and this continues to be our absolute priority,” said Becton’s chief executive, Matthew Chun.
The group will be continuing a due diligence process to consider existing and additional incomplete and conditional recapitalisation and acquisition proposals. Becton said it expects to be able to provide an update on the due diligence process in early 2009.
