Southbury Group and South Canterbury Finance owner Allan Hubbard has appointed Sandy Maier, who worked as the statutory manager for the DFC in the early 1990s, as CEO for a year, replacing interim CEO Timaru accountant Nigel Gormack. The Press reported that Maier was working on a 'reasonably urgent' turnaround of the Timaru-based finance company, which needs a capital injection and asset sales to bolster its balance sheet before the end of the current government guarantee in October 2010. The Press also reported that South Canterbury was close to raising NZ$25 million through a convertible note issue.
Changes at SCF have been slow and its recapitalisation plans are still unclear. Two months ago it received emergency funding of $75 million from Pyne Gould Corporation's Torchlight Credit Fund, colloquially described as a vulture fund which lends to troubled entities. SCF used that to repay US$50m to American investors and still has to pay them another US$50m in four instalments by the end of March. US$12.5m is due at the end of this week. Maier said there was a capital raising closing at the end of the week to raise $25 million through the issue of convertible notes to habitual investors. This is less than indicated in a debenture prospectus released in October which said $40m to $75m would be raised.
Here is the full South Canterbury release to the NZX on Tuesday.
South Canterbury Finance Limited is pleased to announce that Mr. Sandy Maier has assumed the role of Chief Executive Officer. Mr. Maier has been contracted by South Canterbury Finance's parent company, Southbury Group Limited, under a consultancy arrangement which sees him assuming the role of Group CEO and CEO of South Canterbury Finance. Mr. Maier's role will include making recommendations to the Board with respect to the restructuring of Group financial affairs and overseeing South Canterbury Finance's loan portfolio. Mr. Maier replaces Mr. Nigel Gormack, interim CEO since 1 December. Since his successful engagement as Statutory Manager of the Development Finance Corporation from 1990-92, Mr. Maier has led several restructures across a wide range of sectors. The Boards of Southbury and South Canterbury Finance have confidence that Mr. Maier's appointment will assist them in making effective decisions particularly in relation to the ongoing efforts regarding the restructuring and recapitalisation of South Canterbury Finance. South Canterbury Finance Chairman Mr. Allan Hubbard, major shareholder of the Group, said "I welcome the appointment of Sandy Maier and also want to thank Nigel Gormack for stepping in to the CEO role at such short notice and seeing the company through an important transitional period which included the recent Standard & Poor's announcement of a reaffirmed BB+ credit rating (upgraded to Negative Outlook from Creditwatch Negative)."