SCF blames adviser for share price drop

Thursday 5th August 2010 1 Comment

South Canterbury Finance is blaming a 39% plunge in its preference share price on a financial adviser who told clients it will struggle to get a new cornerstone investor.

The NZX sent a ‘please explain’ letter to South Canterbury after the preference shares sank to 10 cents from 16.50 cents yesterday. Chief executive Sandy Maier responded, saying he was aware of a financial adviser writing to clients with the shares and advising them that the firm’s recapitalisation plan will probably fail.

“South Canterbury Finance confirms that positive discussions are continuing with parties who remain interested in participating in the proposed recapitalisation of the company,” Maier wrote in response.

South Canterbury has kept under the radar over the last month as it continues to roll over its investments as the so-called wall of maturities in October draws nearer. Over the June quarter, the firm clawed back more than $50 million in outstanding debts.

Businesswire.co.nz

Comments from our readers

On 6 August 2010 at 10:36 am I got the email said:

I recieved the letter from the adviser in my email, however it did NOT say what Sandy is stating. It basically said "to remain liquid SCF is selling off its good loans at discounts, which in turn is destroying the value for the preferance shareholders" - This is very true, if they ARE letting people out of their loans as discounts, then they are destroying shareholder funds, which is my perpetual shares! SCF should be disclosing this. The email did NOT say that a new shareholder is not still in the pipeline and am astonished that Sandy can lie to the NZX like this.