Pyne Gould Corporation now holds additional sway over South Canterbury Finance after its Torchlight subsidiary agreed to a revised $100 million funding facility.South Canterbury announced today that an existing $75 million facility initially provided by G
Pyne Gould Corporation now holds additional sway over South Canterbury Finance after its Torchlight subsidiary agreed to a revised $100 million funding facility.
South Canterbury announced today that an existing $75 million facility initially provided by George Kerr’s New Zealand Credit Fund has been replaced by a $100 million loan from Torchlight Security Trustee Limited (TST).
TST is 100% owned by PAM, which is PGC’s asset management business and chaired by Mr Kerr.
The term of the facility has been extended to November 30, 2010.
The new funding arrangement replaces a previous agreement between South Canterbury’s parent, Southbury Corporation, and Mr Kerr’s Torchlight Fund No 1 LP for an additional equity injection of up to $37.5 million, which is not now proceeding.
South Canterbury’s Trustee has granted a further waiver, subject to certain conditions, from compliance with the risk weighted asset covenant in clause 16.1(c) of the Trust Deed which will expire on 31 August 2010.
South Canterbury chief executive Sandy Maier said the new arrangement “provides the company with increased liquidity through a simple structure”.
Mr Kerr, chairman of the Torchlight Fund, said the changed arrangements were “practical and signify the ongoing willingness of Torchlight to support the turnaround of South Canterbury Finance”.
The companies did not disclose the ranking of the new debt in the statement to the stock exchange this afternoon. However, the previous arrangement gave Torchlight senior lending status.
Torchlight now has a prior charge on up to $151 million or 7.2% of South Canterbury's assets under the company’s trust deed.
This was within the deed limit and was approved by the Crown under the Company’s Crown guarantee deed.
South Canterbury Finance had withdrawn its latest prospectus while the funding arrangements were being finalised.
The company said this week that more than 5000 debenture holders with investments totaling close to $172 million had, by 3 June 2010, agreed to roll over investments maturing in the coming months.
South Canterbury’s debenture holders are backed by the extended Crown retail deposit guarantee scheme.
