South Canterbury not allotting investments until new prospectus registered

Following its credit rating downgrade to BB+ on August 13, South Canterbury Finance (SCF) said today it had suspended allotting securities to investments made after August 13 until it had released a new prospectus and investment statement, expected to be available by the end of next week. This means investors who rolled over funds or invested new money since August 13 will see their money put in trust rather than receive debentures. They can receive debentures once the new prospectus is written or can ask for their money back. South Canterbury's prospectus and investment statement are being upgraded to reflect the downgrade and other developments SCF has announced to the market, South Canterbury said. South Canterbury is looking for a new cornerstone investor and a capital injection. The company will make its yearly profit announcement later today. South Canterbury's credit rating was downgraded by Standard and Poor's from BBB- to BB+ on August 13. Any investments made after the downgrade, including roll-overs on maturing investments, were being held on trust by South Canterbury on behalf on investors, General Manager of Funding Kevin Gloag said. "Any funds we receive from investors from today until the updated offer documents are available will be held on trust by us and investors will be asked to reconfirm their investment when those documents are available," Gloag said. "It is expected that the amended Prospectus and new Investment Statement will be available by the end of next week," he said. Letters are being sent to investors today to advise that investors who applied for an investment or re-investment after August 13 are entitled to a refund of their investment money, with interest, South Canterbury said. Likewise, investors to whom securities were allotted after August 13, but before South Canterbury temporarily suspended allotting securities, are entitled to cancel their allotment and receive a refund of their investment money in accordance with section 37A of the Securities Act 1978. "We are suggesting to investors that they wait until the amended offer documents are available before deciding what course of action to take. Where we haven't heard from affected investors, they will be sent an updated Investment Statement (and advised where they can obtain the updated Prospectus) and asked to decide whether to reconfirm their application for an investment or re-investment once they have had a chance to consider the updated offer documents," South Canterbury said. South Canterbury Finance also said it would announce its preliminary result announcement for the year ended 30 June 2009 later today.