South Canterbury Finance works to restore confidence

South Canterbury Finance is a one-year gig for change manager Sandy Maier who is not ruling anything in or out as he works to restore confidence in a finance company he admits could have collapsed.

South Canterbury Finance is bigger than most of the other finance companies ever were, he said.

The company has a new prospectus in the market and Mr Maier is on a roadshow meeting financial advisers.

"I think investors feel the magic of South Canterbury Finance is tarnished. I have to tell them what comes next," he said.

South Canterbury Finance and its owner Timaru-based businessman Alan Hubbard have relationships with investors lasting decades.

The relationships had been stressed with the events of the last year and needed to be rebuilt.

An unintended consequence of the Government's deposit guarantee scheme was that a lot of finance company debentures are maturing between now and the end of the first guarantee scheme in October.

South Canterbury has been accepted for the extended scheme.

"We are making the assumption that there may not be another guarantee (after that) and we wouldn't want to be in it. We want to be standing on our own two feet."

Since Mr Maier became chief executive the company has carried out three capital raisings. It wants to diversify funding and is not ruling out further capital raisings, asset sales or new sources of investment.

"Businesses continue to need capital as they grow and change and we are no exception. There will be other capital needs and we will meet them."

The company is now divided into a good "go-forward" business, a bad bank and a private investment business comprising Helicopters New Zealand, a stake in Scales Corp and other investments.

The company is generating cash from the bad business by selling the written down loans. "It could have some more provisions or it could have some profits," Mr Maier said.

The good business was well-positioned as a rural lender with credit tight and other finance companies out of action.

"We don't think there are going to be many new finance companies in the next couple of years."

The private equity investment part of the business would provide good income and anything could happen to it long term.

"We will get a lot of cash out of the bad book, we will get really good earnings out of the ongoing finance company and we will get an interesting lotto ticket out of the private equity business," Mr Maier said.

The company had been talking "fairly promiscuously" with a wide range of people.

"People who would buy our bad assets, with people who want to buy some of our good assets, with people who want to inject a little bit of capital, with people who want to pitch an IPO, with overseas investors that want to buy in, with groups that claim to have substantial money locally."

But there was nothing to announce.

Mr Maier acknowledged the role of 82-year-old Mr Hubbard who "stepped up to the plate and followed through on his promises in tangible ways."

"If Alan had not been there it would have been a near thing, yeah absolutely."

Canterbury businessman George Kerr also moved to support South Canterbury Finance during capital raisings when others were walking away,but Mr Maier would not speculate if Mr Kerr could be a successor to Mr Hubbard.

"George is the best person to ask about George's intentions as to what may happen on any front. And,he is some times pretty public and sometimes pretty cryptic, at least with me.

"Alan is a very spry 82 and he is at work every morning at 6.30am and is on the phone to me."

"Alan's desire to support the business was not totally altruistic. Alan believes this is a very good business," he said.

Mr Maier himself has not made a long term commitment to the company.

"I'm sort of on a one-year deal. I'm a problem solver, a turnaround guy," he said.