Kerr's Torchlight extends $100 mill facility to South Canterbury

Friday 4th June 2010

George Kerr’s Torchlight Fund agreed to provide $100 million of funding to South Canterbury Finance, replacing an existing $75 million facility and a planned equity investment in the firm’s parent, Southbury Corp.

The existing facility was from New Zealand Credit Fund, another Kerr vehicle. Torchlight Security Trustee Ltd. will take over the facility and increase it by $25 million, SCF said in a statement today.

As a result, Torchlight won’t proceed with an equity injection into SCF’s parent, Southbury.

Kerr said the new arrangements “signify the ongoing willingness of Torchlight to support the turnaround of South Canterbury Finance.”

The restructured facility lifts the amount of prior charges under the company’s trust deed to $151 million, or 7.2% of total tangible assets, which is within the limits of the deed, SCF said.

Sandy Maier, SCF’s chief executive, said the firm’s liquidity is also being helped by early debenture rollovers of almost $172 million from some 5,000 debenture holders.

“The willingness of existing debenture holders to extend the maturity dates of their investments is further underpinning liquidity by significantly reducing our forward funding requirements,” Maier said. There has been “widespread” interest in the firm’s offer of securities paying 8% annual interest and which are covered by the Crown’s extended retail deposit guarantee, he said.

South Canterbury Finance’s owner Allan Hubbard quit the board after 30 years as chairman, taking on a new title of ‘president for life.’

SCF was downgraded two notches to B+ by Standard & Poor’s last month after the ratings agency said the finance company wasn’t reducing its financial risks fast enough.

(BusinessWire)

15:27:42

Businesswire.co.nz

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