SCF owed nearly $104m by parent company

Wednesday 22nd December 2010

South Canterbury Finance's (SCF) parent company owes it around $104 million, the receivers' first report into Southbury Corp says.

Southbury Corp owns 100% of the shares in SCF, and in turn is wholly owned by Southbury Group. Kerryn Downey and William Black of McGrathNicol are receivers for all three entities.

In their first report into Southbury Corp, published this week, the receivers said Southbury Corp was an investment vehicle, with no employees. Its primary asset was its shareholding in SCF.

Receivers had been appointed to Southbury Corp after it failed to satisfy a demand from SCF for repayment of money due under loan facilities.

When they were appointed on November 3, Southbury Corp owed SCF $103,908,343. Interest continued to accrue on that amount.

Southbury Corp's major assets were a loan to Southbury Group, and its shareholding in SCF.

A value of close to $18.1 million was put on the advance to Southbury Group, while the SCF shareholding was valued at $245.5 million.

The receivers noted that the schedule of assets and liabilities was prepared from information obtained from the company, and had not been verified.

The returns ultimately available to Southbury Corp would depend on the sale of SCF's assets, the receivers' report said.

The receivers also said they were aware of concerns raised by investors and other parties in respect of the activities of the South Canterbury Finance Group before the appointment of receivers.

"We are aware of the possibility that SCL (Southbury Corp) may have been a party to some of these transactions," the report said.

"Potential breaches of legislation that are identified during the course of the receivership will be reported to the relevant regulatory authorities.

"Due to the ongoing nature of the investigations, we are unable to provide details regarding individual issues or our findings since doing so could prejudice any subsequent proceedings which may be taken."

NZPA

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