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Torchlight equity proposal for SCF proved too hard: Maier

Thursday 10th June 2010

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South Canterbury Finance took an extended $100 million funding line from George Kerr's Torchlight vehicle when it became clear an earlier equity injection plan was becoming "too sticky" to proceed, says chief executive Sandy Maier.

He denied media reports that the deal originally proposed, to inject $37.5 million of new equity into SCF through the issue of convertible notes to SCF's parent, Southbury Corp, had been vetoed by the Treasury, under the retail deposit guarantee scheme, of which SCF is a member.

"I'd characterise it differently," Maier told BusinessWire. "That transaction was sufficiently sticky that as we explored the issues, we decided to do it in a simpler fashion."

Previous equity raisings of the kind proposed had involved both debt and equity components, making them difficult for some investors to understand and "subject to criticism."

"It was the hybrid nature of it and that would appear and be characterised," said Maier. "The Treasury had a view, the board had a view, the auditors had a view, the management had a view, and we said 'let's stop and do it simply instead'."

SCF is undertaking a series of roadshow presentations around the country in the next 10 days, starting tonight in Christchurch.

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