South Canterbury Finance Limited

[Enumerate]

Haven't heard much about Sam Kelt lately except Kelt Capital pulling is sponsorship of one of NZ;s richest races
l

On the 18th of June the SCF 75% interest in Kelt Finance was sold to interests of the Kelt family.

[percy]

So heres an example of some of the troubles. Mercer Group is in the poo. They had $11.4 in borrowings due over 12 months and breached their banking covenant. They owe SCF some $1.4m but that debt has now been taken over by Humphrey Rollestons Gresham Finance.

Trouble is AH is the major shareholder in Mercer so he presumably can't help bail them out at the moment. Luckily, perhaps Rangitata Plains Farms is also a substantial holder in Mercer - except AH own RPF. Or what about Jones Macky Limted shareholding - nope: also owned by AH. James Urquart may help Mercer - except he's already taken a bath on EHF

Ian Urquhart may have taken a bath with EHF but it would be pocket money to him.Love to see him on the board with Rolleston.Rolleston in his tailor made suit, and Urquhart in his opp shop cast offs.

[Alan3285]

As minimoke says Treasury seems to work to a different timeline - this from a media announcement re Vision .... Eligible depositors with Vision Securities will be contacted within six weeks and provided with information about how to claim under the terms of the Crown retail deposit guarantee.

http://www.treasury.govt.nz/publicat...media/01apr10a

But maybe SCF do have separate rules because they are so big and a vital cog in the economic wellbeing of so many

There is an article in the Herald today that seems to imply that, whilst the first ones took longer, the process has improved and gotten faster but depends on the quality of paperwork (fair enough I suppose):

NZ Herald - 5 Jul 2010

"The first group of Vision Securities investors, which were told the company had failed on April 1 this year, received payment on Friday"

So currently about 13 weeks by the sounds of it.


Alan.

[minimoke]

...the process has improved and gotten faster but depends on the quality of paperwork (fair enough I suppose):

"The first group of Vision Securities investors, which were told the company had failed on April 1 this year, received payment on Friday"

So currently about 13 weeks by the sounds of it.

Alan.

Though there were only 953 debenture holders who were owed $30m. Aren't there something like 30,000 depositors with SCF?

[Alan3285]

Though there were only 953 debenture holders who were owed $30m. Aren't there something like 30,000 depositors with SCF?

Yes, you are right - so likely the documentation and processes in place at SCF are that much better, but I wouldn't bank on getting paid out any quicker.

Alan.

[Snapper]

As long as they're not desperate for the cash, having funds still earning good interest and covered by the guarantee doesn't sound too bad to me.

[minimoke]

....so likely the documentation and processes in place at SCF are that much better.......
Alan.

Weren't people saying recently that AH did business on trust and a handshake. If that was his way of doing business I'm not so sure SCF would have significantly better systems than Vision. Sure they would have to be relatively robust but with the prospect of shelling out $1.3b I'd imagine Treasury will be looking pretty closely at all the papers flowing across their desk - and that won't be a fast process. 14 days just isn't going to happen - so best SCF doesn't' go under to test assertion.

[Dubdee]

The fact is that the GG only applies to interest earned up until the date of default. From then until repayment by the Crown you are out of luck with further interest. So it looks like you take an opportunity cost of 3 months interest but at least you get G risk at a decent yield.

[Alan3285]

As long as they're not desperate for the cash, having funds still earning good interest and covered by the guarantee doesn't sound too bad to me.

Indeed - I don't have spare cash right now (I'm fully invested in listed stuff), but if I did, it woudn't worry me one bit if I had to wait three months to get my guaranteed pay-out.

Most investors have rolling maturities anyway, so liquidity isn't a major issue, and if you puit those across two or three banks / guaranteed finance companies, you wouldn't have too much to worry about in general.

Alan.

[Alan3285]

The fact is that the GG only applies to interest earned up until the date of default. From then until repayment by the Crown you are out of luck with further interest. So it looks like you take an opportunity cost of 3 months interest but at least you get G risk at a decent yield.

So, if you lost three months opportunity, and had your money in for 12 months prior, you'd get 8% over 15 months, which is about 6.4%pa.

Doesn't sound too bad to me if you want rock solid security of the GG.

Alan.