Kerr's Torchlight confirms additional investment in SCF's parent Southbury

Kerr's Torchlight confirms additional investment in SCF's parent Southbury
George Kerr's Torchlight Fund has confirmed it will take up an option to increase its investment in South Canterbury Finance's parent company, Southbury Corporation, by NZ$15.5 million to NZ$37.5 million. The move, outlined by interest.co.nz last week, means the money received will be used by Allan Hubbard’s Southbury to subscribe for South Canterbury ordinary shares. Read South Canterbury Finance's statement below:
Torchlight Fund No1 LP (“Torchlight Fund”) has confirmed that it will take up an option to increase its investment in Southbury Corporation Limited which will enable additional equity to be injected into South Canterbury Finance Limited. Torchlight Fund will increase its investment in Southbury Corporation by a further $15.5 million which, in addition to the $22 million investment already announced, will increase the total investment to $37.5 million. Subject to receipt of consents from the Trustee for South Canterbury Finance, the Crown and existing Southbury Corporation noteholders, the investment will be subscribed in full on 31 May 2010 and in turn Southbury Corporation will invest the same dollar value in cash into new ordinary shares in South Canterbury Finance on the same day. South Canterbury Finance will guarantee the redemption by Southbury Corporation of the securities issued to Torchlight Fund and will grant a prior ranking charge over its assets in support of the guarantee. In addition, Southbury Corporation will indemnify South Canterbury Finance for any payments required to be made under the guarantee. South Canterbury Finance Chairman Allan Hubbard says the additional funds subscribed by Torchlight Fund are a further endorsement of the repositioning of the business in the last six months.
“Strategically, South Canterbury Finance is one of only a handful of finance companies with the ability to provide funds for business growth and development beyond the traditional banking sector.” Torchlight Fund Chairman George Kerr says the Fund is committed to working with Southbury Corporation to assist South Canterbury Finance to execute its strategy of moving towards three distinct business groups being firstly, traditional finance, secondly, private equity and thirdly, real estate and asset management assets. South Canterbury Finance Chief Executive Officer Sandy Maier says the further investment by Torchlight Fund is welcome. “The funds provided by Torchlight Fund will consolidate South Canterbury Finance’s cash position now and the new equity provides further flexibility going forward.”

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