English postpones overseas trip to deal with South Cant Finance

Finance Minister Bill English has postponed an overseas trip originally scheduled this week so he can stay in the country to deal with South Canterbury Finance.Prime Minister John Key made the announcement at his post-cabinet press conference this afternoon, saying Mr English felt he should be in the country to deal with the issue.Mr English is understood to have briefed the cabinet today on the Crown's exposure to South Canterbury Finance, with the focus on minimising any bill to the taxpayer.

Finance Minister Bill English has postponed an overseas trip originally scheduled this week so he can stay in the country to deal with South Canterbury Finance.

Prime Minister John Key made the announcement at his post-cabinet press conference this afternoon, saying Mr English felt he should be in the country to deal with the issue.

Mr English is understood to have briefed the cabinet today on the Crown’s exposure to South Canterbury Finance, with the focus on minimising any bill to the taxpayer.

The Timaru-based finance company owes 30,000 investors about $1.7 billion, of which about $1.5 billion is covered by the retail deposit guarantee scheme.

South Canterbury needs a sizable cash injection or faces receivership this week.

Chief executive Sandy Maier said the company had been in talks with up to three potential suitors.

In an announcement to the stock exchange this morning, South Canterbury said it was still in discussions with interested parties "in an endeavour to put together a recapitalisation and restructuring solution acceptable to all stakeholders."

However, the company said in view of recent media speculation "there can be no certainty that the proposals will be successfully implemented."

Reports over the weekend suggest the government may also take part in a recapitalisation by taking over the company’s impaired loans to give any new private investor(s) more comfort. South Canterbury's latest accounts reveal the company is carrying just under $600 million of impaired loans on its balance sheet.

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