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South Canterbury expects to name investor tomorrow

Monday 30th August 2010

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South Canterbury Finance expects to announce plans for recapitalising and restructuring the firm tomorrow, the deadline on a waiver for its trust deed breach.

Chief executive Sandy Maier said SCF is still in discussions with interested parties following its management team’s spending nine months to resuscitate a company that needs new investment ahead of tomorrow’s deadline for a rescue plan. People who have money deposited with SCF are protected already by the government’s retail deposit guarantee scheme.

The cost to the taxpayer through that scheme could be as much as $900 million, whereas the government might only take a $250 million hit if it agreed to a private recapitalisation which left the government owning a “bad bank” of non-performing loans from which it would seek value over time.

“We have three parties looking at the investment,” Maier told BusinessDesk, while reiterating in his NZX statement that there can be no certainty that the proposals it has been pursuing will be successfully implemented.

The political and media attention that SCF’s recapitalisation had gained, owing largely to the activities of supporters of Allan Hubbard, the 82-year-old president for life of the company, were “very unhelpful,” Maier said.

“There’s quite a lot of noise and emotion and there are people who feel they can pressure the government and pressure us,” he said.

“That’s very unhelpful for the government and to ourselves.”

Among those rumoured to be looking to invest include Sydney-based businessman Duncan Saville, with a $175 million bid for SCF’s so-called “good bank”, which has between $700 million and $1 billion of good loans, according to Fairfax Media.

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