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Nomura buys SCF ‘good bank’ assets valued at $123 mln

Nomura buys SCF ‘good bank’ assets valued at $123 mln

By Paul McBeth

Aug. 16 (BusinessDesk) – Japanese investment bank Nomura Holdings has bought the so-called ‘good bank’ assets of failed lender South Canterbury Finance Ltd.

Receiver William Black of McGrathNicol said the sale price is confidential, though the loan book, made up of SCF’s consumer, business and rural loan portfolios, had an aggregate value of $123 million.

That’s been written down from the $579.8 million value of the three portfolios since the receiver’s first report in November last year, though it’s unclear if assets have been moved out of those books.

Nomura’s head of fixed income in Asia ex-Japan Jai Rajpal said the loans will continue to be managed from Christchurch, and will give the Japanese bank “a platform from which to lend and invest in additional opportunities in New Zealand.”

McGrathNicol’s Black said the sale was “an excellent outcome” and another step to maximising the government’s return after it stepped in last year to pay out all creditors and assume control.

SCF’s failure prompted a $1.6 billion call on the government’s retail deposit guarantee scheme, and the Crown to paid out all other creditors to assume control of the failed lender. The net cost of that call has ballooned from the initial $400 million to $500 million cost flagged by Prime Minister John Key.

Earlier this month SCF’s receivers sold its stake in insurance adviser Financial Synergy Ltd. to local interests including co-owner David Hair. Today’s announcement means SCF has exited holdings in Helicopters NZ Ltd., Scales Corp. Face Finance Ltd. and some dairy farms, raising more than $200 million.

The Serious Fraud Office has yet to decide on whether it will pursue prosecution over SCF’s failure, and is looking at a handful of the lender’s transactions.

The white-collar crime investigator charged SCF owner Allan Hubbard with 50 counts of fraud in relation to his investment vehicles Aorangi Securities Ltd. and Hubbard Managed Funds.


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