South Canterbury Finance calls in receiver

South Canterbury Finance calls in receiver

By Paul McBeth

Aug. 31 (BusinessDesk) – South Canterbury Finance Ltd. has asked its trustee to appoint a receiver after failing to pull together a rescue deal.

The embattled lender said it was unable to complete a recapitalisation and restructure and asked for all of its undertaking and assets to be sent into receivership. The collapse means the government faces a net bill of some $600 million for debenture and bond holders covered by the retail deposit guarantee. All of its listed securities have been suspended from trading.

Prime Minister John Key told reporters yesterday the retail deposit guarantee covered investors in the finance company, though the government will also weigh up how best to protect the tax-payer’s interests, as well as the impact on the wider economy.

Finance Minister Bill English will make a statement this afternoon, once trustee Trustee Executors has made a statement, according to a spokesman for the minister. The Treasury is also expected to make a statement. English delayed a trip to South East Asia by at least a day because of SCF’s turmoil.

Before the announcement was made, chief executive Sandy Maier told Radio New Zealand the decision would surprise people, and that there would be winners and losers. He also said it will probably be misinterpreted and take several days before people realised what it meant.

The trustee has agreed to the request, according to the statement.

(BusinessDesk)

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