Three hundred and sixty.
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SCF does not need an equity injection. It simply needs to extend the maturity profile of its debt reflecting the short term "wall of debt" bump later this year and the medium term downsizing of the loan book.
This can all be achieved using existing levels of equity.
A secondary factor is the restructuring of equity from equity assets to tier-1 capital.
It strikes me that the government has already demonstrated their use of standover tactics. First, they force registration under the retail deposit guarantee scheme (read the Standard & Poors credit reports if you object to this asssessment). Second, they cause significant harm to the SCF ability to raise domestic debenture funds and they cause direct harm to the credit rating through the statutory management of Allan Hubbard.
Now you are suggesting they become an equity partner in SCF, based on some risk weighted discount I presume. Given the risks and problems have been caused by the government, to a large degree, this would strike me as standover tactics.
Perhaps that is how some players work, in the Viaduct. It is not a good look for a government.
Perhasp thsi is being overstated. In todays news Sandy Maier says "Allan's statutory management has hurt but there are so many other variables involved," he said when questioned about the effects of the statutory manager's report which criticised Hubbard, the financier's largest shareholder.
"There's been nothing catastrophic but it has gotten more difficult," Maier said, referring to general economic conditions and difficulties raising money and getting investors to renew.
From a balance sheet perspective, even a "retail novice" can be satisfied that the basic levels of equity are already in place (mainly as equity assets - not as tier 1, but this will sort itself out over time).
Reading SCF accounts is actually straight forward. If you compare this to Macquarie, for example, it is childs play. Macquarie accounts, with the twists and turns - it is surprising anyone believes they understand them.
Back to SCF. It is also fascinating and rewarding to understand the impairment mechanisms. Would you impair a solid loan receivable at 9% because market rates should be higher? The nervous schoolgirls over at interest.co.nz seem to believe this is a cash impairment! Various Lost Souls believe this loan should probably carry a weighted risk rating of 350% for capital adequacy rules.
Back on this SCF thread no one else posts anything quantitative at even a balance sheet level - so you expect me to?!?
The real interesting bit is the Income Statement analysis. What hope is there of intelligent, informed discussion here - when we can't even get past a pro forma balance sheet?
I have detailed my conclusions and posed a number of questions that I was hoping would lead to informed discussion on SCF financials. No one has responded. Further, I have no intention to "file a report" when the full year accounts will set a new datum (these are due in about one month).
There are other basic questions to ask. Why is it that so many Aucklanders, with no financial exposure to SCF are so terribly interested that every aspect of this company be portrayed in the worst possible light? Why are there so few people willing to declare their interest? I am just a humble psychic tea leaf reader ... with a few SCFHA ... I don't have significant financial connection in the South Island ... I am not a Viaduct "player" ... I find these things difficult to understand.
"SCF does not need an equity injection. It simply needs to extend the maturity profile of its debt reflecting the short term "wall of debt" bump later this year and the medium term downsizing of the loan book". Enumerate
YEAH RIGHT. As mentioned by many commentators they're carrying many dubious items on their balance sheet, the worst of which is the aforementioned tax losses which they're stating has a net present value of over $100 million dollars, when I think its clear to almost everyone on "this planet" that there's no credibility whatsoever to this balance sheet assertion as there's no chance whatsoever of the company being profitable in the forseeable future.
You are in "denial", and that's putting it as kindly as possible, I believe there's a widespread understanding within the professional financial community that SCF needs a significant capital injection, but what would all those professional commentators and professionals know right ?
There no way there's a further single cent to write-down on the deliquent loan book of $500m since 1 January 2010 right ? and there's no possibility that there's any further new loan deliquencies and provisioning required since 1 January 2010 ?
I worked out you can't be a lawyer, I think that's abundently clear, they have professional training and an understanding of realistic outcomes.
That you have a financial interest in SCF and are a big supporter of AH is abundently clear but its clearly clouding your judgement. BTW I have no idea what your statements regarding the Viaduct refer too, perhaps that's south island slang for a central Auckland JAFA ?