SCF amends prospectus, notes another resignation

South Canterbury Finance has made 27 amendments to its prospectus and investment statement due to events subsequent to the October 20 registration date.Several of the amendments relate to last week's pre-warning of an upcoming loss, further writedowns and adjustments to its June year accounts.

South Canterbury Finance has made 27 amendments to its prospectus and investment statement due to events subsequent to the October 20 registration date.

Several of the amendments relate to last week’s pre-warning of an upcoming loss, further writedowns and adjustments to its June year accounts.

Others refer to the company’s new shareholding and capitalisation regime, with amendments to security rankings after an injection of funds from George Kerr’s Torchlight Credit Fund and from Allan Hubbard’s Southbury Corporation.

The company also noted that group credit manager Peter Bosworth resigned on December 3, 2009.

This had not previously been announced in stock exchange filings, unlike the resignations of former chief executive Lachie McLeod and chief financial officer Graeme Brown.

The latter executives have since been replaced by Sandy Maier and David Jarman respectively.

In a market update last week South Canterbury said it was working through a series of issues with new auditor Ernst & Young after discovering that adjustments might be needed in its 2009 accounts in respect of the valuation of certain items.

The company admitted that it used the wrong valuation for an investment in 67.2 million preference shares in South Island Farm Holdings (SIFHL), a company owned by Mr Hubbard.

South Canterbury Finance has instructed an independent valuer to value the SIFHL preference shares in accordance with the correct methodology.

In another development, South Canterbury said it had subsequently sold 6.8 million SIFHL ordinary shares that were held by it to an independent third party for $6.8 million (being the price initially paid by it for those shares).

The 67.2 million SIFHL preference shares held have all been redeemed for $67.2 million and South Canterbury had made an advance of that amount to SIFHL.

“A material difference between the $67.2 million value attributed by the company to the SIFHL preference shares and the fair value that is determined following independent advice on the matter may result in a prior period adjustment being required in respect of the year ended 30 June 2009,” South Canterbury said in notes to the memorandum of amendments dated February 9.

“It is noted that any difference arising from a revaluation of the SIFHL preference shares will fully reverse in the financial year ending 30 June 2010.”

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