South Canterbury Finance intends launching a new batch of deposit products after gaining acceptance to the government's extended retail deposit scheme.Existing investors no doubt breathed a sigh of relief when the announcement came late on Thursday. The o
South Canterbury Finance intends launching a new batch of deposit products after gaining acceptance to the government’s extended retail deposit scheme.
Existing investors no doubt breathed a sigh of relief when the announcement came late on Thursday. The onus is now on the Treasury if South Canterbury can't maintain its solvency.
The acceptance provides a safety net for investors and will allow the company to improve its funding base while it continues to restructure its business and work through its under performing loans.
Failure to join the extended guarantee scheme could have resulted in receivership, putting at risk nearly $1.8 billion worth of investor’s money.
Chairman Allan Hubbard regarded the acceptance as a seal of approval.
“It is the next step in the journey back towards the company’s traditional role as a source of funding to support economic growth,” he said.
Chief executive Sandy Maier said the extended scheme will allow the offer of a diversified suite of longer term and new deposit products.
That would provide for a stable long term funding base, he said.
Last week South Canterbury said George Kerr’s Torchlight Fund No 1 had agreed to inject $22 million of additional capital into South Canterbury in return for convertible notes issued by South Canterbury’s parent Southbury Corp. The fund had an option to increase that to a total of $37.5 million by April 30.
That injection follows a further $152.5 million of equity in the form of the acquisition of shares in two Hubbard companies, Helicopters NZ and Scales Corp.
Recent capitalisations has resulted in the company having $253 million of equity capital.
