Now South Canterbury Finance has failed in its bid for recapitalisation and requested receivership, courage is required from other financiers to fill the void.Minutes after hearing the news Federated Farmers president Don Nicolson told the National
Now South Canterbury Finance has failed in its bid for recapitalisation and requested receivership, courage is required from other financiers to fill the void.
Minutes after hearing the news Federated Farmers president Don Nicolson told the National Business Review that trading banks need to be as open as possible in the wake of South Canterbury’s failure.
He said particular attention needed to be paid to their customers who were also clients of South Canterbury.
“Everybody has to be able to carry on,” Mr Nicolson said.
He said all sectors of farming were dynamic, viable and needed good relationships with financiers to maintain their businesses.
“It’s not as if they are half finished hotels under development.”
Mr Nicolson said this is a time for trading banks to show courage in filling the finance vacuum that was created with South Canterbury heading into receivership.
However, he added that farmers also needed to take special care with lenders and be as open as possible.
“Keep them informed. Close contact is vital and that will generate respect.”
Mr Nicolson said South Canterbury chief executive Sandy Maier deserved respect for his efforts to recapitalise.
“Now, with receivership, the emotional connection has been severed and is now in the hands of a third party, which can be a positive thing.”
Federated Farmers economics spokesman Phil York agreed with Mr Nicolson that viable farms should have little to worry about as trading banks move into fill the void – particularly for seasonal finance requirements.
“Farmers shouldn’t panic. Trading banks will be involved in the process,” Mr York said.
“I’m hoping commonsense will prevail.”
He said dairy farmers were in the strongest position with a predicted Fonterra payout of more than $7 a kilogram of milksolids expected for the current season.
Also Mr Nicolson said sheep and beef farmers were also expecting higher prices this year due to reduced supply in the market.
Mr York said there was anecdotal evidence that suggested a number of former sheep farmers who had sold their properties for dairy farm conversions had invested in South Canterbury and were part of the 35,000 depositors and debenture holders owed about $1.7 billion.
He added that in turn, much of the sheep farmer funds were in turn invested into the dairy developments on the same properties.
