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Southbury borrowed $103.9M from South Canterbury: receiver

Southbury borrowed $103.9 mln from South Canterbury: receiver

By Paul McBeth

Dec. 22 (BusinessDesk) – Southbury Corp., the parent of South Canterbury Finance Ltd., owed $103.9 million to the failed lender at the time of its receivership, according to the receivers.

The Allan Hubbard-related entity was still accruing interest on the loan, and SCF also held four other registered financing statements against Southbury Corp., held over personal property and investment securities dating back to Sept. 30 last year, according to the first receivers report on Southbury Corp.

Southbury’s assets as at Nov. 3 were its investment in SCF, valued at $245.5 million, and an $18.1 million loan to the ultimate parent, Southbury Group.

Kerryn Downey and William Black of McGrathNicol were called in to wind down the SCF parent entities, Southbury Corp. and Southbury Group last month as part of their wind-down of SCF. The lender made a call on the loan to its parent after calling in the receivers, which led to Southbury being wrapped into the receivership process.

SCF called in the receivers at the end of August after it failed to bring in new cash to keep afloat, prompting a call on the government’s deposit guarantee scheme. The Crown paid out all other creditors to assume control of the lender, and is looking to recoup as much of the $1.6 billion payment as it can.

Life got tougher for the Hubbard empire when he and some of his interests were placed under statutory management in June, which led to Serious Fraud Office investigations into the dealings of his Aorangi Securities Ltd. investment vehicle and some SCF transactions.

“We are aware of a number of concerns raised by investors and other parties in respect of the activities of the South Canterbury Finance Group prior to the appointment of the receivers,” Downey and Black said. “We are aware that SCL (Southbury Corp.) may have been a party to some of these transactions.”

Earlier this month, Woolpak Holdings and Plum Duff Ltd. became the latest Hubbard-related vehicles to join the process, albeit under PricewaterhouseCoopers’ watch. Their failure means a 64% stake in NZAX-listed wool processor New Zealand Wool Services Ltd. will be up for grabs in the New Year.


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