South Canterbury Finance in holding pattern

Sth Canterbury Finance chief executive Lachie McLeod (L) and company founder Allan Hubbard.

South Canterbury Finance (SCF) has now put plans for a new prospectus out to the end of September, and there is still no word on the company's planned capital raising.

The company had ceased allotting securities under its debenture prospectus late in August.

SCF said it now plans to register a new prospectus following the release of its audited accounts on or before September 30. This extends the time-frame of a week South Canterbury set at the end of August for registering a new prospectus and investment statement.

South Canterbury also said it was in discussions with its US bond holders and potential new investors and would have more information in 'coming weeks.' South Canterbury said on August 28 it would make an announcement on its planned capital raising within 3 weeks.

On August 28, SCF said it expected to release a new prospectus and investment statement within a week. However, this has now been extended to as late as September 30 as the company engages in talks with US bond holders, searches for two new independent directors and tries to raise fresh capital from new investors.

South Canterbury said it had had "constructive discussions" with bond holders in the US who subscribed to a US$100 million private bond placement in 2008. South Canterbury's credit rating downgrade in mid-August from BBB- to BB+ meant the bond holders were eligible to seek repayment within three months of the downgrade. The talks are continuing, South Canterbury said.

SCF also said it was in advanced discussions with two potential new independent directors and that it would make a further announcement on the restructuring and capital raising process in coming weeks.

South Canterbury is currently holding any new investments in trust on behalf of subscribers and not allotting securities following its credit rating downgrade, pending an amended prospectus or registration of a new prospectus.

Yesterday the Southland Times reported that Wanaka's largest resort had been put into receivership and South Canterbury Finance was the lender involved.

- INTEREST.CO.NZ