South Canterbury Finance is getting $22 million of new equity from Torchlight Fund No. 1 LP, a company associated with Pyne Gould Corp.
This takes the amount of money injected into the finance company since December to more than $200m.
Allan Hubbard's Southbury Corp continues to own 100 percent of South Canterbury Finance and the Timaru-based businessman is welcoming the investment by Torchlight.
Southbury Corp is issuing $22m of secured convertible notes to Torchlight Fund No. 1 LP, and Torchlight has an option to increase its purchase of notes to $37.5m by April 30.
Southbury Corp will subscribe for the same dollar value of new fully paid ordinary shares in South Canterbury Finance. This injects $22m of cash into South Canterbury and maintains Southbury's level of ownership at 100 percent.
The statement did not detail the terms of the notes or state if they ultimately change the ownership of Southbury.
Mr Hubbard, who is South Canterbury Finance's chairman, welcomed the investment by Torchlight Fund into Southbury Corporation notes.
"This is a vote of confidence in South Canterbury Finance and its future prospects based on the fund's understanding of the business and the wider business cycle. We are very pleased to have the fund's involvement."
Torchlight Chairman George Kerr said the restructuring of financial institutions required innovative solutions to complex situations.
"The Torchlight team is pleased to support South Canterbury Finance through this investment," he said.
Mr Kerr is the great-great grandson of FH Pyne, who started one of Pyne Gould Corp's founding businesses in 1887. He has more than 20 years experience in the banking and asset management industries.
South Canterbury Finance chief executive Sandy Maier outlined the progress in restructuring and rebuilding the capital base of South Canterbury Finance.
"We are continuing to consider the various alternative transactions and structures available to us as we look forward to achieving the requirements for non-bank deposit takers," Mr Maier said.