Hubbard bolsters finance company

Timaru businessman Allan Hubbard is strengthening South Canterbury Finance by putting his family company's shareholdings in Helicopter (NZ) Ltd and Scales Corp Ltd into the lender.

Southbury Corporation Ltd, which is indirectly controlled by Hubbard and his wife, sold its 100 per cent shareholding in Helicopters (NZ) and 64 per cent holding in Scales Corp to South Canterbury Finance in return for 317.7 million newly issued fully paid shares worth $152.5 million and $10 million of cash on February 28.

The transactions were reviewed by independent experts approved by the Crown, under the company's Crown guarantee, who certified that they were at fair value and on an arm's-length basis.

The company is working with the Treasury on its application for acceptance into the extended retail deposit guarantee scheme effective from October 12 this year through to December 31, 2011.

Canterbury Finance also disclosed yesterday that provisions for losses on impaired or non-performing assets had been increased by $180.3 million and as a result the company reported a preliminary unaudited net loss after tax of $154.9 million for the half-year to December 31.

South Canterbury Finance chief executive officer Sandy Maier said sectors other than property were largely performing satisfactorily.

"The half-year result incorporates a total of $229 million of losses on asset realisations and additional allowances for impairment. The underlying trading results show a breakeven result for the six months which is creditable given the significant disruption and costs experienced."

South Canterbury Finance now holds approximately 79.7 per cent of the equity of Scales Corp.

Hubbard said both Helicopters (NZ) and Scales Corporation were excellent businesses with which he had a long and personal association, as a founder of Helicopters (NZ) and as a driving force in Scales.

Strategic Finance yesterday released unaudited figures for the six months to December 31 showing an after-tax trading loss of $99.8 million and a net loss after tax of $32.8 million. The company said the audit of its accounts has been delayed while talks continue with its trustee. The talks were triggered by a fall in Strategic's loan book and the failure to meet a payment to investors.

- NZPA