South Canterbury Finance wins reprieve
Timaru-based South Canterbury Finance has reached an agreement with US investors to repay $US100 million over the next five and a half months.
The company is also close to securing a new credit facility of
$75 million with a new third party, the identity of which is secret.
The new credit line will be of some relief to investors after the company’s banks cancelled its existing, undrawn $100 million standby credit facility.
Following the announcement a trading halt on the company's listed debt securities has been lifted.
The company is also working on a new or amended debenture prospectus. It ceased taking in new money on August 20 as it needed to make amendments to its prospectus reflecting the company’s financial performance over the last six months.
That prompted Standard & Poor's to place the company’s BB+ credit rating on credit watch with negative implications.
Mr Hubbard has so far injected $40m of new capital into the business after the company disclosed writedowns of property loans.
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Comments and questions2
Take your money and run.....fast. The only reason they are taking 5 months to repay is because they cannot pay now. God help investors if SCF are allowed to issue a new prospectus and start taking more money. The Govt should not guarantee any further money in SCF, the hole is deep enough already. The Govt has already set aside $800m to cover defaults by Finance Companies. SCF would be top of the list of likely candidates for a bailout.
If as SCF say the related party lending is their best lending why don't they refinace those loans? The reason.....no-one else would touch them.
As I said run.......fast.
This is not a reprieve, this is a signal they cannot get their money in one hit, as the cashflow will not allow it.
The secured parties will the 1st to be looked after while mum and dad investors are led along a merry path? have we not seen this all before?
SCF announce a secretive $75m possible. Surely if Alan Hubbard is worth $550m he would just stump up, and not with underwrites.
SCF have always maintained they are different to the other finance companies because of the major shareholder.
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