Struggling Melbourne property group Becton has secured a crucial funding injection from the Oman Investment Fund, a sovereign wealth fund owned by the oil rich Arab state of Oman.
Under the deal, the OIF will pay $28 million for a half share in Becton’s unlisted retirement property business, which controls 884 retirement dwellings and has a further 268 dwellings under development. The agreement will run for five years.
As part of the partnership arrangement, OIF will also pay $3.1 million for a 9.9% share in Becton Property Group.
Becton will use the $31.1 million it receives from OIF to pay down debt and help fund the company’s development pipeline.
Like most property companies, Becton has struggled to deal with a high level of debt and a dramatic deterioration in property sector conditions. In the past 12 months its share price has crashed from $2.09 to just 19c.
Becton’s chief executive Matthew Chun said OIF’s injection was important for the company.
“They facilitate both debt reduction and balance sheet stability to assist us in delivering our development pipeline in markets we believe have sound underlying fundamentals, such as social housing and retirement.”
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