Becton receives a ‘get out of jail’ card from the Omani’s. Goodbye Goldman Sachs

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On 6 September Goldman Sachs bought Suncorp’s $73.6 million debt facility over Becton Retirement. They informed the Stock Exchange and Becton that they were interested in discussing a possible long term investor association with Becton. 55 days later they were gone and Becton now has $77 million worth of debt rather than $73.6 million, plus its interest rate cost has increased by 3.5%p.a. Becton is calling it a good result. The $77 million has been provided by ANZ Bank for the first $37 million, with between two and three years maturity and an LVR covenant of less than 40%. The balance is being provided by existing Becton investor, the Oman Investment Fund [being the Omani government sovereign investment fund]. It already is heavily invested in Becton Retirement.

In essence, this buys the Becton management time and puts friends in place. The Omani’s are extracting a high price, in addition to the interest rate; they receive a bonus cash payment of 10% of the gross asset value of the Becton portfolio over $77 million when it’s debt is paid out or the Becton villages are sold. How much did Goldman Sachs make out of its 55 days ownership of the debt it purchase from Suncorp – which was most probably discounted? We don’t know. Interestingly, it is Goldman Sachs that is doing the feasibility review of separating Aveo out of FKP.