S/PRICE: NZXR: Share Price Enquiry

5 Aug 2010 5:40 pm

NZXR 05/08/2010 S/PRICE

REL: 1740 HRS NZX Regulation

S/PRICE: NZXR: Share Price Enquiry

We write with respect to the continuous disclosure Listing Rules. Listing Rule 10.1.1 is set out in the Schedule to this letter. In summary, this rule requires issuers to immediately disclose any Material Information to NZX. The rule provides limited exceptions to this obligation. Material Information does not need to be disclosed where a reasonable person would not expect the information to be disclosed and where the information is confidential and its confidentiality is maintained and where one of five safe harbours applies.

On 3 August, 2010, we note that the price of the South Canterbury Finance Preference Shares (SCFHA) on the NZDX, decreased from an opening price of $16.50 per share, to close at $10.00 per share the same day; this represents a decrease of 39.4%.

Given this price movement, please advise NZX whether South Canterbury Finance Limited ("SCF") continues to comply with Listing Rule 10.1.1.

Could you please provide NZX with an answer to the above question (email: announce@nzx.com) before 1.00 pm today, Thursday 5 August 2010.

Please note that SCF's response to this letter will be published in full to the market.

Yours faithfully

Garth Stanish Business Leader NZX Regulation

RESPONSE OF SOUTH CANTERBURY FINANCE TO SHARE PRICE ENQUIRY

Dear Garth

Share Price Inquiry

We refer to your letter of today's date regarding South Canterbury Finance Limited's compliance with its continuous disclosure obligations under Listing Rule 10.1.1.

In view of the recent significant decrease in the market price of South Canterbury Finance Limited's listed perpetual preference shares, NZX has asked whether South Canterbury Finance Limited continues to comply with Listing Rule 10.1.1.

South Canterbury Finance Limited confirms that, in its view, it continues to comply with Listing Rule 10.1.1.

South Canterbury Finance Limited is aware that a financial adviser has written to clients who hold perpetual preference shares expressing the view that the recapitalisation process currently being pursued by the company is unlikely to be successful and setting out the potential implications for perpetual preference shareholders if that is the case. South Canterbury Finance Limited confirms that positive discussions are continuing with parties who remain interested in participating in the proposed recapitalisation of the Company.

Yours Faithfully

Sandy Maier

SCHEDULE

10.1.1 Continuous Disclosure of Material Information: Without limiting any other Rule, every Issuer shall:

(a) once it becomes aware of any Material Information concerning it, immediately release that Material Information to NZX, provided that this Rule shall not apply when:

(i) a reasonable person would not expect the information to be disclosed; and

(ii) the information is confidential and its confidentiality is maintained; and

(iii) one or more of the following applies:

(A) the release of information would be a breach of law; or (B) the information concerns an incomplete proposal or negotiation; or (C) the information comprises matters of supposition or is insufficiently definite to warrant disclosure; or (D) the information is generated for the internal management purposes of the Issuer; or (E) the information is a trade secret.

In this Rule 10.1.1, an Issuer is aware of information if a Director or an executive officer of the Issuer (and in the case of a Managed Fund, a Director or executive officer of the Manager) has come into possession of the information in the course of the performance of his or her duties as a Director or executive officer. End CA:00198066 For:NZXR Type:S/PRICE Time:2010-08-05:17:40:21

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