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SCF claws back $50m, appoints managers

Thursday 8th July 2010

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South Canterbury Finance clawed back more than $50 million in outstanding debts over the June quarter as it approaches a $500 million "wall of maturities" of debentures coming due in October.  

The troubled Timaru-based lender also announced several new senior management appointments as it pursues a permanent restructure. 

Asset recoveries this calendar year now stand at $256 million, up from $202 million as at March 31, as chief executive Sandy Maier continues his mission to turn around the company and stave off another failure in the finance sector.

"This is a significant achievement and a very useful contribution to liquidity to meet our ongoing funding requirements," Maier said in a statement.

The company also made four senior management appointments as it restructures into three units - a "good" bank traditional financier, a "bad" bank holding problem loans, and an investment unit holding assets that don't fit into the other categories.

Dean Clark will head the tradition lending unit as general manager of South Canterbury Finance, while Garry Sue was appointed head of internal audit to set up risk management, audit and monitoring systems. Mike Coburn and Des Hammond have been made senior advisers to the CEO, with Coburn focusing on real estate and Hammond taking on the investment portfolio including South Canterbury's holdings in Scales Corp., South Island Dairy Farms, and Dairy Holdings.

Maier said South Canterbury is continuing to negotiate its recapitalisation and will make further announcements when appropriate.

South Canterbury was left reeling last month when rating agency Standard & Poor's cut it deeper into junk territory to a B-minus after the government placed key shareholder Allan Hubbard and some of his business interests under statutory management.

Though SCF was specifically excluded from the statutory management, and had its place under the government's deposit guarantee scheme reaffirmed, it expected some investors will be put off rolling over their cash with the company.

Hubbard said at the time he hoped to secure an agreement from an offshore company to inject capital into South Canterbury by the end of June. Earlier this week, the Overseas Investment Office said it hadn't received an application in relation to the lender.

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