South Canty still a $1 billion hole as good assets dwindle
Receiver's report on collapsed finance company shows government still owed $1.24 billion with only toxic and complicated assets remaining to be realised.
The total cost of the South Canterbury Finance to government is becoming clearer as receivers confirm only $520 million has been repaid in the year following the $1.755 billion Crown bailout.
The second six-monthly report for South Canterbury prepared by receivers McGrathNicol released today said $345 million had been repaid to the government in the six months to August 31.
The report says the Crown were owed $1.58 billion after the collapse of the company in August 2010 led to the Crown Retail Deposits Scheme being activated. An additional $175 million was advanced by - and repaid to the Crown by receivers - to settle prior claims against the company. This puts the amount still owed to the Crown at $1.24 billion.
Receivers note a balance remains of $103 million, mostly represented by term investments held by the group.
During the most recent six-month period receivers sold shareholdings in Helicopters NZ and Scales Corporation, and the company’s “good bank” to Tokyo-based investment bank Nomura and Face Finance to GE Capital.
The sale prices of these assets were not disclosed but receivers said the majority of $31.1 million in investment share realisations related to Scales. Face Finance had a book value of more than $100 million, while the "good bank" was valued at $123 million.
These sales leave only a 33.6% share in Dairy Holdings and the “bad bank” - as well as toxic related-party loans to the Southbury group - for receivers still to realise.
Offloading Dairy Holdings is unlikely to occur in the short term as the sales process has been mired in court action after other shareholders alleged receivers applied pressure to cancel existing shareholder agreements.
Matt Nippert
Thu, 27 Oct 2011
Thu, 27 Oct 2011
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South Canty still a $1 billion hole as good assets dwindle
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