Receivers for South Canterbury Finance expect to update borrowers this week on their funding arrangements as prospective buyer interest in the stricken company's assets heightens.Kerryn Downey and William Black, of McGrathNicol, said they had made signifi
Receivers for South Canterbury Finance expect to update borrowers this week on their funding arrangements as prospective buyer interest in the stricken company’s assets heightens.
Kerryn Downey and William Black, of McGrathNicol, said they had made significant progress assessing the group's operations over the past week with the help of South Canterbury Finance management and staff.
They said they had already fielded a significant number of enquiries from prospective buyers and were working with the Crown to compile a co-ordinated register of interest.
The receivers said they also expected to update South Canterbury customers this week on various matters affecting business operations, including funding arrangements.
A spokesman for McGrathNicol told NBR that the update would look to address concerns borrowers had over revolving credit facilities and seasonal finance – "just how that’s going to be managed, what’s going to be done and by whom,” the spokesman said.
South Canterbury Finance went into receivership last week, with the government paying out $1.6 billion to cover debenture holders' deposits covered by its retail deposit guarantee scheme.
South Canterbury’s lending activities strayed into non-traditional areas in recent years, such as property development finance, which was blamed for a steep rise in impairments before receivership.
However, a large chunk of the company’s loan book remains tied to its traditional customer base such as farming businesses in the South Island.
Last week Federated Farmers sought clarity from the receivers about future funding arrangements to farm businesses.
“At this stage of the season farmers have a number of large outgoings, with little or no income. Seasonal finance facilities are critical to farm businesses because it will be a number of weeks before farm revenues resume," Federated Farmers president Don Nicolson said.
Federated Farmers highlighted other non-bank options available to farmers to help them manage cashflow, including Ravensdown Fertiliser Co-operative, Balance Agri-Nutrients, Combined Rural Traders, RD1 and PGG Wrightson.
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