SCF receivers to hire investment bank

South Canterbury Finance receivers seek helper for asset sales

17th Sep 10, 5:15pm by Gareth Vaughan

South Canterbury Finance's receivers are seeking an adviser to help them sell the group's assets.

Receivers Kerryn Downey and William Black of McGrathNicol said they had invited investment banks to submit proposals for advising and assisting them.

South Canterbury Finance was placed in receivership on August 31 after the company, led by CEO Sandy Maier and advised by Forsyth Barr, failed to secure an equity injection before a waiver to the group's trust deed ran out. Through the Crown retail deposit guarantee scheme, the receivership left the taxpayer with a tab of nearly NZ$2 billion.

Downey and Black said since their appointment they had received about 150 inquiries from New Zealand and overseas investors who were interested in acquiring various South Canterbury Finance assets.

South Canterbury Finance's assets include its “Bad Bank” which holds about NZ$700 million worth of toxic loans, and its “Good Bank” which holds about NZ$900 million of small ticket and rural lending. There’s also Helicopters NZ, a 79.7% stake in Scales Corporation and 33% stake in Dairy Holdings which were tipped in by owner Allan Hubbard earlier this year.

Meanwhile, the receivers also said they had made significant progress towards agreeing a staff retention package with South Canterbury Finance's senior management and staff. At the time of the receivership Maier said he was contracted until December.

"The support and co-operation we have received from staff and senior management since the commencement of the receivership has been very valuable," said Downey.

"Retaining those key people is essential if we are to continue to maintain ongoing business operations, meet customer funding requirements, and preserve the value of the Group's assets."

Downey and Black said they would provide more information on the sales process over the next few weeks.

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5 Comments

by Andy Rodgers | 17th Sep 10, 5:42pm 1284702165

"Retaining those key people is essential"

Where would staff from a bankrupt company go otherwise?

by Red Dog The Pi… | 17th Sep 10, 6:14pm 1284704061

Just because an organisation is insolvent,that does not automatically mean that all of its employees are incompetent.

It is often the actions of one person which results in an organisation failing.

I have had involvement with an organisation where the risky actions of one person threatened the jobs of 25 other people,and the very existence of that entity.

For example,what was the difference to SCF between having Humphrey Rolleston and having Mr McLeod as an influence on the company's affairs ?

by goldenfox | 17th Sep 10, 6:44pm 1284705853

Bad call Red Dog

Incompetent McLeod had no skin in the game vs. Rolleston whom did!!

You tend to care more if you have real money involved.

Now that this is a public organisation, watch SCF turn into the public sector - the advisory firms, investment banks, valuers and everyother unproductive leech in society will be lining up to get a feed from the bones. Recievers have every incentive to milk this asset for all its worth, don't expect a quick sale (unless Kerr gives them a nice backhander).

Double Dip will be lucky to see 2c in the Dollar on this one.

by SmoKey | 17th Sep 10, 7:13pm 1284707618

Are they hiring Goldman Sucks for this ?

by Red Dog The Pi… | 18th Sep 10, 12:41pm 1284770514

Not Bad Call Golden Fox.

By way of comparison,the organisation I was involved in which found itself on the edge of a cliff. was due to the actions of a person who had a substantial ownership stake in the business.

That ownership % was larger than Rolleston had in SCF.

My observation was that the policy of appointing sales orientated bankers took place in the very early 1990's,and we have now seen how much precarious lending has been made on first mortgage by those parties.

When you have someone like Mcleod who has come from that environment and is presented with a target market of lower security lending,with inadequate governance by SCF's owner,we see the inevitable result.

If you care to reflect,there are decades of examples of people entrusted with lending funds,domiciled at many institutions throughout NZ.

A minimal number of those people have had an ownership stake in the lending institution.

That did not meant that they involved themselves in lending which was cavalier.

On the other hand,by contrast,you may wish to reflect on the number of failed organisations in recent years where those lending,have had an ownership stake.

Did Mcleod ever pay for his equity stake in Southbury ?

It was reported that he had a $15 million advance from SCF in this respect.

As at 31 March 2010,those shares were valued as part of the HMF reports,at ten dollars each.