Beleaguered property development company Goodman Group has won valuable breathing space in its battle to deal with more than $4 billion of debt, with Macquarie Group agreeing to provide $300 million in short-term finance.
The deal – which involves a nine-month financing facility, extendable for a further 15 months, plus options over 414 million shares in Goodman Group – will allow Goodman to meet all of its debts that expire in the remainder of 2008-09.
Chief executive Greg Goodman says the company can now focus on its quest to reduce its debt mountain.
“The new facility addresses the group’s immediate debt refinancing and enables Goodman and its advisers to execute on a range of further capital management initiatives to ensure the group is well capitalised for the long term. Our key focus remains the de-leveraging of the business.”
But the breathing space created by the Macquarie deal only really lasts until 30 June. Goodman Group remains locked in negotiations with its lenders to refinance and extend the terms of $225 million of debt due to expire in September and December.
Goodman is also talking to strategic investors (thought to include sovereign wealth funds or pension funds) that would invest in the company on similar terms to Macquarie.
Speculation about Goodman’s future has grown in the past few months as the company has struggled to deal with its debt load.
Last month, McGrathNicol and KPMG were appointed by Goodman’s lenders to review the business and its debt position.
There have also been suggestions Greg Goodman may take advantage of the group’s depressed share price to take it private, although these claims have been denied.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
