New head for South Canty Finance

Corporate fixer Sandy Maier has been appointed chief executive of under-pressure South Canterbury Finance.

The Harvard Law School and Yale graduate was brought in by the Government to be statutory manager of the failed Development Finance Corporation in 1990 and since then has been a director or chairman of many New Zealand companies and organisations, including Bank of New Zealand and Mighty River Power.

Maier replaces Nigel Gormack, who has been South Canterbury Finance's (SCF) interim chief executive since December 1, and the company said that his role would include making recommendations to the board about financial restructuring and overseeing the loan portfolio.

The appointment follows SCF's Christmas Eve news that credit rating company Standard & Poor's was stepping back from a potential ratings downgrade.

S&P affirmed South Canterbury Finance's BB plus long term rating and removed it from CreditWatch Negative, where it was placed on September 20. The outlook on the rating is still negative.

Gormack said on Christmas Eve that the change in outlook meant the rating had gone from a one in two chance of a downgrade to about a one in three chance of a downgrade.

S&P said the affirmation reflected SCF's success in ameliorating specific concerns. The company had three new independent directors, was accessing the debenture investor market and its audited statements for fiscal 2009 revealed nothing of concern.

A downgrade of the company's credit rating by S&P in August gave investors in the private placement market in the US the right to be repaid US$100 ($142.53) million.

S&P said negative pressure would abate if SCF was able to moderate liquidity pressures, manage its credit loss experience, eliminate related party investments and successfully restructure and recapitalise its business to a level that is consistent with a BB plus rating level.

SCF chairman and major shareholder Allan Hubbard welcomed Mr Maier's appointment and thanked Mr Gormack for stepping in as CEO at short notice and seeing the company through an important transitional period which included the S&P's reaffirmed BB plus credit rating.

- NZPA