English rubbishes SCF bid talk

Finance Minister Bill English rubbishes talk of credible NZ$1.4 bln bid for South Canterbury Finance; says govt wanted to avoid "cheap opportunistic sale"

13th Oct 10, 10:25am by Alex Tarrant

Finance Minister Bill English

There was no acceptable NZ$1.4 billion bid on the table for South Canterbury Finance at the time the troubled finance company was put in receivership, Finance Minister Bill English said on Morning Report.

Treasury is to release papers this week on the events surrounding the collapse of South Canterbury Finance, while the Auditor-General will start a review of the government deposit guarantee scheme that meant the government is paying out NZ$1.6 billion to SCF investors.

English was asked whether the papers will show why the bid that was on the table for South Canterbury just a day after it went into receivership wasn’t accepted.

It has been reported without named sourcing in both the NZ Herald and Dominion Post that Sydney-based businessman Duncan Saville had put a NZ$1.4 billion bid to government in the lead up to SCF's receivership in the final days of August.

English told Morning Report host Geoff Robinson that he could not say for sure what the papers would say about any particular bid.

"What I can say is that there was no particular bid put in front of government that was recommended by The Treasury," English said.

"There’s been quite a lot of speculation both from bidders and from commentators that there was some magic solution put forward that the government didn’t accept. That is simply not correct," he said.

"You can imagine that where the government has been facing the risk of paying out one and a half billion dollars, there was no way we were going to be pushed into some kind of cheap, opportunist sale."

Geoff Robinson: "So there was no NZ$1.4 billion bid for South Canterbury on the table at that time, which is what’s been strongly rumoured?"

Bill English: "That’s correct. There was no NZ$1.4 billion bid on the table."

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6 Comments

by Gareth Vaughan | 13th Oct 10, 3:51pm 1286938282

FYI, David Cunliffe talking Parliament of the Super Fund and Ngai Tahu being involved in a bid for South Canterbury Finance. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=106…

Would be interested to know what the apparent $1.5b was comprised of. Taxpayer loan anyone?

by Wayne | 13th Oct 10, 4:00pm 1286938844

Yep. Just read that piece too, Gareth. Unless English is telling absolute porkies (unlikely given the risks) me thinks that Cunliffe has't done his homework well enough (or alternatively has done it but is using selective information to try and score some political points). Might have been an offer on the table but as you speculate, there's likely to be unacceptable conditions in it. Bit of game-playing by Labour, perhaps? Time will tell...

by Duncan Bridgeman | 13th Oct 10, 5:01pm 1286942479

It's worth remembering that Sandy Maier was appointed to the Ngai Tahu board not long before SCF's receivership.

by Alex Tarrant | 13th Oct 10, 6:23pm 1286947386

FYI,

Here is the exchange between Cunliffe and English in Parliament on Oct 13

http://www.parliament.nz/en-NZ/PB/Business/QOA/a/4/9/49HansQ_20101013_00000001-1-South-Canterbury-Finance-Recapitalisation.htm

by Richard A | 13th Oct 10, 8:47pm 1286956025

Complete load of rubbish about a 1.4bln cash bid for SCF - It never ceases to amaze me how poor the financial reporting in this country is. Shurely the press cld get conformation or otherwise from someone who was there before they print this poorly researched stuff. These are the same journos who would report allied as "paying' 390M for the Hanover book with Scrip - do they not understand the difference between that and cash !!!!!

by Southern Dude | 13th Oct 10, 9:18pm 1286957880

The journo's and Cunliffe are correct except that the deal on the table was structured differently and the net cost to the Government was $400M ( not the $800M they now are comfortable with ) - it was not for a cash payment of $1.4B. It also recapitalised the company so that it could continue to service NZ companies with a robust balance sheet.

Sandy Maier, Forsyth Barr and the SCF board turned down the offer and put in a reduced offer from Duncan Saville - strange move.

Now we find Maier promoted two deals post receivership on behalf of Saville, Ngai Tahu and NZ Super when all other interested parties were prohibited from doing so by the receiver who purely asked for expressions of interest. And Sandy Maier was a director of Ngai tahu Holdings.

(Edited for legal reasons. - Bernard Hickey. A reminder to everyone not to make unsubstantiated claims).