Beleaguered South Canterbury Finance (SCF) said this morning it remained in talks with interested parties as it strives to pull together a recapitalisation, but said success was no certainty.
(Updated with PwC confirming report on Hubbard's affairs; Green Party).
SCF, which has a waiver to a Trust Deed breach until tomorrow, faces receivership within days if it cannot convince the government to back a recapitalisation proposal now sitting before Treasury. Cabinet is expected to consider the proposal today and receivership is highly likely within the ensuing 48 hours without that further financial support from the taxpayer.
The company's statement follows a Fairfax report linking Sydney-based Infratil investor Duncan Saville to SCF and one from Radio New Zealand linking private equity firm Clearwater Capital Partners to SCF.
Read SCF's statement below:
South Canterbury Finance announced today that it is still in discussions with interested parties in an endeavour to put together a recapitalisation and restructuring solution acceptable to all stakeholders.
In view of recent media speculation, the Company also announced that there can be no certainty that the proposals it has been pursuing will be successfully implemented. The Company expects to be in a position to make an announcement to the market on Tuesday 31 August.
Meanwhile, PricewaterhouseCoopers has confirmed it wrote a report on Allan Hubbard's financial affairs, but has not disclosed what was in it. Supporters of Hubbard have said it cleared him of wrong doing.
PwC Partner Maurice Noone said: "We have been engaged by Russell McVeagh, who are acting for Mr Hubbard. No public report has been issued by us, and as will be appreciated, we must respect client confidentiality."
Foreign ownership?
Green Party co-leader Russel Norman said the government should act to prevent South Island farmland from falling into foreign hands.
“South Canterbury Finance owns a significant chunk of prime South Island farmland. John Key’s Government needs to move quickly to ensure this does not all fall into the hands of foreign owners,” Norman said.
“The Government appears to have two stark choices to prevent this farmland falling into foreign ownership: It can tighten the overseas investment laws to restrict foreign ownership of large parcels of farmland," he said.
“The best option would see the Government take an equity stake in the finance company retaining control of the fate of the farmland and enabling an orderly restructuring of the company. This is much like how the financial crisis has been managed abroad, where governments took equity stakes in failing banks."
Your view below?
24 Comments
The problem is SCF is such a dog that any potential rescuer is going to demand a huge margin of safety - so if the govt. do come in on the rescue its likely that the private sector partner is going to be massively feather bedded, so that most of the risk STILL stays with the taxpayer.
So when 12 months down the line (or whenever) the re-animated corpse gets into trouble again the taxpayer will yet again be screwed......
“We have three parties looking at the investment,” Maier told BusinessDesk today, while reiterating in his NZX statement that there can be no certainty that the proposals it has been pursuing will be successfully implemented.
The political and media attention that SCF’s recapitalisation had gained, owing largely to the activities of supporters of Allan Hubbard, the 82-year-old president for life of the company, were “very unhelpful,” Maier said.
“There’s quite a lot of noise and emotion and there are people who feel they can pressure the government and pressure us,” he said.
“That’s very unhelpful for the government and to ourselves.”
Among those rumoured to be looking to invest include Sydney-based businessman Duncan Saville, with a $175 million bid for SCF’s so-called “good bank”, which has between $700 million and $1 billion of good loans, according to Fairfax Media.
Now NZHerald Business Editor Liam Dann says Allan Hubbard should apologise.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=106…
"Whatever happens from here it is clear that his failure as a businessman has put hundreds of millions of taxpayer dollars at risk.
In the context of the enormous constraints on public spending we face in areas like health and education this is an appalling financial mess that Hubbard has ultimately left the taxpayer to clean up.
Cries from his supporters, that if he'd been left in charge it would all have been alright, no longer ring true.
Put the probe into his personal financial entities to one side. The real story is South Canterbury Finance - the $900 million liability hanging around the taxpayer's neck. That was his baby."
cheers
Bernard
As Bernard said on tvnz.... ""You could have a significant drop down in dairy land prices in the South Island. That then becomes an issue for everyone, particularly for the major banks who have lent upwards of $5-10 billion to dairy conversion farmland in the South Island."
The banks...oh jeez save the banks...bugger land being affordable, we gotta save the banks. Stuff worrying about the entry cost for young farmers being beyond the insane..we just have to save the banks. Now how much will we throw at SCF........
And so it came to pass that the govt used taxpayer dosh to maintain the bloated dairy land prices and save the banks...at the cost of perpetuating an insane system that diverted the profits in dairying to the banks! What sort of a nuthouse economy is this?
Ah Gerald : Your SHOUTING reminds me of our silent friend , SORE LOSER . Have a go Gerald , critics be DAMNED !
And if dairy farms do fall in price by 60 % over the next few months , we'll back up Alan Crafar's old truck and buy us a dozen or two . YIPPPPPPPPPPEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE !
GERALD, I FULLY AGREE THAT THE GOVERNMENT HAS LEFT US FULLY EXPOSED TO THE COST OF OTHER PEOPLES POOR INVESTMENT CHOICES, BUT NOT HAVING ALL THE FINANCIAL DATA AT MY FINGERTIPS TO BE SURE OF THE RIGHT DECISION TO BE MADE RE SCF BAILOUT V RECEIVERSHIP I CAN'T THINK WHAT ELSE TO DO EXCEPT PRAY THAT JOHN AND BILL GET IT RIGHT!!!!!!!!!!!!!!!!!!
GOD SAVE NZ
AND KEEP SHOUTING GERALD, IT IS ACTUALLY QUITE A NICE CHANGE FROM BEING POLITELY NASTY... ;)
Well summarised. Full steam ahead, Mr Hide. Steady as she........ooops.
They're only trained for one thing. Even Obama today just waffled. FDR would have had 'em gather round for a fireside chat, and laid it on the line. Told it like it is.
I used to think we'd educate them before it was too late, but that ain't gonna happen. We're going to have to wait in the wings with our Plans B, until the penny drops.
Hopefully we won't be totally disenfranchised at that point.
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