Pyne Gould Corporation says the NZ$100 million loan arranged by its subsidiary Torchlight Investment Group for South Canterbury Finance is unaffected by SCF owner Allan Hubbard's statutory management and notes it ranks ahead of the finance company's debentures.
In a release issued via the NZX, PGC, which also owns finance company Marac, said it was "helpful" for PGC shareholders and the market in general to have access to the release given it clarified the extent of PGC’s investment in the Torchlight group of funds.
In the release Torchlight managing director, John Duncan, said the NZ$100 million loan arranged for SCF was unaffected by the statutory management of certain business interests of Allan and Jean Hubbard. Duncan said PGC had contributed NZ$15 million to Torchlight with the balance of the fund coming from third parties.
"The loan to SCF was syndicated by Torchlight amongst co-investors," said Duncan.
"Torchlight’s investment, which has the approval of the Trustee and of the Crown under SCF’s Crown guarantee deed, ranks ahead of debenture holders."
Noting Torchlight, which is chaired by significant PGC shareholder George Kerr, was established to meet a market requirement to provide funding for distressed credit opportunities outside the normal banking environment, Duncan added that Torchlight considered the funding facility an excellent investment.
“Our facility, being secured ahead of other charges under the Trust Deed, is particularly robust, and our investment is well secured and profitable”.
Hubbard was placed under statutory management by the Government last Sunday and is being investigated by the Serious Fraud Office. SCF is not part of the statutory management.