Announcement
GENERAL: SCF: Additional Equity for South Canterbury Finance
08:30am
SCF
01/04/2010
GENERAL
REL: 0830 HRS South Canterbury Finance Ltd
GENERAL: SCF: Additional Equity for South Canterbury Finance
28 March 2010
Additional Equity for South Canterbury Finance
South Canterbury Finance today announced that it had agreed terms, along with
its parent company, Southbury Corporation Limited, for an additional
injection of equity capital.
Southbury Corporation will issue $22 million of secured convertible notes to
Torchlight Fund No. 1 LP. In addition, Torchlight Fund No. 1 LP has an option
to increase this to a total of $37.5 million by 30 April 2010.
Southbury Corporation will use the proceeds to subscribe for the same dollar
value of new fully paid ordinary shares in South Canterbury Finance, and
therefore will retain 100 percent ownership of South Canterbury Finance. As a
result South Canterbury Finance will receive additional capital of $22
million in cash.
South Canterbury Finance Chairman Allan Hubbard welcomed the investment by
Torchlight Fund into Southbury Corporation notes.
"This is a vote of confidence in South Canterbury Finance and its future
prospects based on the Fund's understanding of the business and the wider
business cycle. We are very pleased to have the Fund's involvement."
Torchlight Chairman, George Kerr says:?"The restructuring of financial
institutions requires innovative solutions to complex situations. The
Torchlight team is pleased to support South Canterbury Finance through this
investment."
South Canterbury Finance Chief Executive Officer Sandy Maier says the new
capital is a further step in the significant progress already made to
restructure the capital base of the Company.
"Much has been achieved since the appointment of new independent directors
and a new management team late last year."
Achievements include:
- a significant group restructuring with the provision of $152.5 million of
new equity in February 2010 in conjunction with the acquisition of two
businesses with a record of strong earnings in Helicopters NZ Limited and
Scales Corporation Limited
- a purge of the loan book and increased provisioning for impaired assets
totalling $203.7 million
- improved liquidity to make early repayment of the $US100 million USPP
facility
- retention of a "BB" credit rating from Standard & Poor's (albeit with an
outlook of Creditwatch negative)
- an internal operational division of activities into three groups: the core
well-performing finance business, the impaired or non-performing loan book
including the majority of the property portfolio, and the investments group
which includes Scales Corp, Helicopters NZ and the company's extensive dairy
assets.
The latest capital raising has been arranged by Forsyth Barr. Taking into
account the $22 million of new equity provided by Torchlight Fund No. 1 LP,
just over $200 million in total of new equity has been injected into South
Canterbury Finance since December 2009.
"This is a substantial amount of progress in a short period of time and a
major recapitalisation of the company. We are continuing to consider the
various alternative transactions and structures available to us as we look
forward to achieving the requirements for non-bank deposit takers," Mr Maier
says.
Ends
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For further information contact:
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Sandy Maier
Chief Executive Officer
South Canterbury Finance
021 163 3806
End CA:00193212 For:SCF Type:GENERAL Time:2010-04-01:08:30:13
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