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South Canterbury Finance – Update on restructuring
15 October 2009
South Canterbury Finance – Update on restructuring
South Canterbury Finance is pleased to make the following announcements to its investors and the market.
The Company has reached agreement in principle on repayment terms with the five noteholders who invested pursuant to the Company’s $US100 million Private Placement facility (USPP).
The agreement provides for the principal to be repaid over the next 5.5 months. The Trustee for South Canterbury Finance debenture stock investors, Trustee Executors Limited, and ratings agency Standard and Poor’s, have been briefed on the arrangement. Documentation is in the process of finalisation. Unwinding currency swap hedges on the USPP facility will release cash for South Canterbury Finance.
USPP investors were able to seek immediate repayment of their notes when certain covenants were breached following release of South Canterbury Finance’s audited financial statements for the year to June 2009.
The Company is now moving to register a new prospectus for the issue of debenture stock and deposits. The Company continues to have the benefit of a Crown guarantee under the government’s retail deposit guarantee scheme in respect of its debenture stock and deposits that mature, or otherwise become payable on or before 11 October 2010.
The Company also intends applying to participate in the extended deposit guarantee scheme announced by the Government on 22 August 2009. In order to be accepted into the extended Crown guarantee scheme, the Company will need to meet certain eligibility criteria and be accepted for participation by the Secretary to the Treasury.
South Canterbury Finance has cancelled by mutual agreement with its banks the $100 million standby credit facility. This facility was undrawn.
A new credit facility for $75 million with a new third party provider is in the final stages of being arranged and is expected to become effective over the next week.
South Canterbury Finance is continuing to work with its principal shareholder, Southbury Group Limited and its advisors, Forsyth Barr and Harmos Horton Lusk, on a restructuring and recapitalisation programme for the group. This will include the appointment of new independent directors to South Canterbury Finance. Further details will be announced as they are finalised.
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