Receivers tighten noose on Hubbard’s Southbury

Receivers tighten noose on Hubbard’s Southbury Group

By Paul McBeth

Nov. 4 (BusinessDesk) – Southbury Group, the Allan Hubbard investment vehicle, has been sent to the receivers in a bid to secure control of South Canterbury Finance by seizing the parent’s documents.

SCF’s receivers Kerry Downey and William Black of McGrathNicol added the Southbury group of companies to the list of Hubbard-related entities under its control in a bid to secure access to the firms’ records and ensure better management of the group. The receivers have taken possession of the Southbury’s assets and undertakings that, through SCF funding, hold a wide range of investments.

“It’s a critical step to protect value and ensure we get the best possible outcome for the crown,” Downey said in a statement. “It will also help in ongoing investigations into SCF’s finances.”

Last week, Downey and Black released their first report on the state of SCF, though omitted a recovery estimate. The report showed the lender faced a $315 million shortfall in its balance sheet after almost doubling its charge for impaired loans to $446 million as at Aug. 31.

Last month, Treasury deputy chief executive Gab Mahklouf told Parliament’s Finance and Expenditure Committee the government’s net liability for SCF was between $300 million and $400 million after fees.

The receivers expect $6.5 million owed to employees and the Inland Revenue as preferential creditors will be paid in full, but couldn’t assess whether anything will be left for unsecured creditors, preference shareholders and ordinary shareholders.

Deutsche Bank NZ and Goldman Sachs & Partners NZ to oversee the sales of the financier’s lending business and investments in Helicopters NZ Ltd. and Scales Corp. respectively.

(BusinessDesk)

© Scoop Media