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South Canterbury Finance warns investors

Wednesday 11th August 2010

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South Canterbury Finance has warned investors that they maybe about to get predatory offers to buy their investments at heavily discounted prices.

The company is warning investors to take professional advice before considering any offers to buy their securities at heavily discounted prices below those on the NZX trading platform.

South Canterbury Finance chief executive Sandy Maier says it is an unfortunate reality that speculators do try to profit from lowball offers at the expense of existing security holders.

"It is notable that in both Australia and the United Kingdom there are regulations offering investors a degree of protection from these predatory offers. Further, the Ministry of Economic Development published a discussion paper recently seeking views on the protection that should be offered to security holders in similar circumstances in New Zealand."

The company has been approached with requests for access to the registers of holders of one tranche of the company's bonds and its perpetual preference shares. The company considers that these requests may be a preliminary step taken ahead of an offer to investors and has, therefore, informed the Securities Commission. In the meantime, the company will comply with its obligations under the Securities Act 1978 to provide copies of the registers.

The requests were from Mr Bernard Whimp of Lineside Partners LP based in Christchurch. He is believed to be the same Mr Bernard Whimp who was disqualified by the Registrar of Companies from being a company director for a four year period in October 2006, and who has previously been linked by the media with offers to buy securities for well below their market value.

"We strongly urge South Canterbury Finance investors to consult with their investment or other professional adviser if they receive an offer from any third party for their securities," Maier says.

"South Canterbury Finance strongly values the support of all of its investors and has achieved significant progress in restoring the business to a sustainable platform. The willingness of debenture investors to take advantage of our offer to extend maturity dates is a clear demonstration of the depth of support for the company.

"The focus of the directors and management is firmly on the turnaround and introduction of new equity into the business. The Treasury has also recently confirmed that, despite the statutory management of Allan Hubbard, eligible investors holding South Canterbury Finance securities will continue to enjoy the benefit of the Crown's extended retail deposit guarantee scheme through to 31 December 2011. "


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