Thursday 1st April 2010 |
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Investors in South Canterbury Finance can breathe a sigh of relief after their loyalty helped sway the Treasury in favour of approving its acceptance into the extended government retail deposit guarantee.
The Timaru-based firm joins Marac Finance, Equity Mortgages Ltd., and PGG Wrightson Finance, which was also granted approval today, into the government’s extended scheme that guarantee’s investors’ deposits until the end of 2011.
The essence of South Canterbury Finance’s success has been its very loyal investor base,” chief executive Sandy Maier said in a statement. “Acceptance into the extended guarantee scheme will allow the company to provide attractive investment opportunities that meet their requirement.”
Allan Hubbard, whose Southbury Corp. owns South Canterbury, has poured his own additional funds and assets into the firm to strengthen its balance sheet.
The company’s liquidity was thrown into question earlier this year when an investment statement flagged that it had $1.1 billion worth of debt and securities coming due before the end of the initial guaranteed period. Since then, South Canterbury was downgraded to a BB rating from a BB+ and placed on ‘CreditWatch Negative’ by Standard & Poor’s.
The company received a fillip yesterday when George Kerr’s Torchlight Fund No. 1 LP subscribed to some $22 million worth of convertible notes, with the option increase this by a further $15.5 million.
That adds to the $75 million facility, that’s been fully drawn, he provided the company when its $100 million bank facility was cancelled last year. Investors have stood by Allan Hubbard’s finance company, with about 55% of deposits rolling over after the release of its prospectus in October. Deposits stood at $34.9 million on December 31, from $29.17 million at June 30.
Maier told BusinessWire that South Canterbury had just missed the deadline to lodge their interim support with the NZX, and the company had been granted a waiver to issue the report by Friday next week.
Businesswire.co.nz
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