South Canterbury Finance Limited

[winner69]

Spose if SCF collapsed it would be on the list on the largest comapny collapses in NZ

But if taxpayers bail out most investors would it count.

[Enumerate]

Meanwhile, think of those poor folks who now have no interest income. And maybe reduced capital.

They do have interest income ... the statutory manager just won't pay it.

Simple fact on finance ... EVERY loan portfolio can expect impairments ... the probability of impairments is never zero, if you are talking commercial business loans.

When has Aorangi been declared insolvent? Why does this Statutory Manager behave as if he is an Administrator of an insolvent company. If he does not manage Aorangi - I hope his professional indemnity insurance is fully paid. He could be sued for professional negligence.

This builds on the position that the Statutory Manager does not correctly understand his brief - or he is not up to the task.

[minimoke]

Your post at 1206 was pa bit of a premonition - Mutual Finance gone today so thats around $9m of tax payer support down the tubes.

And further confirmation that if depositors in SCF think they will get their money back in 14 days are in LaLa Land. Mutual Finance can expect a 3 - 4 month delay: and thats for a company with just $8 - $9m in eligible deposits.

[minimoke]

I would be preparing a case for judicial review of my statutory management. I would insist on the restoration of my rights.

I would also be preparing an action to pursue those responsible for damages for the destruction of my reputation and my business.

Looks like you and AH think along the same lines. In todays new it appears he is about to retain Tim Clarke from Russel Mcveagh. That should be a worthy opponent for the draconian state blackboots.

Also interesting to see Hubbard is getting $1,000 cash a week from the Stat man - more cash than he's seen in his life apparently. So not being hard done by from a personal financial perspective. The Cat will be looked after!

[Beagle]

And further confirmation that if depositors in SCF think they will get their money back in 14 days are in LaLa Land. Mutual Finance can expect a 3 - 4 month delay: and thats for a company with just $8 - $9m in eligible deposits.

I concurr, at best it looks like the reference should be 14 weeks, not days. With 30,000 investors I seriously doubt it could be done within even 14 weeks, but probably one would say you'd be reasonably safe assuming 14 months.

That said, I've thought quite a bit about the SM thing after Enumerate emphatic posts and I'm not entirely comfortable with Simon Power using his power in this manner either. There does seem to be a gross inconsistency with other finance company collapses, why excercise the power of SM now other than in the National interest so that a realistic deal can be done, (i.e. AH may hold unrealistic expectations regarding his perceived value of SCF which is hampering a new equity injection) ?

But then we have the conundrum if my source from yesterday is correct, which is better, (or should that read, the lesser of two evils), a Govt owned SCF or Chineese / Asian owned SCF ?

Maybe the Govt should just bail them out like the U.S. Govt bailed out some of their too big to fail financial institutions, put in place proper controls decent directors and managers, (Wait this has allready been done !!!), and provide them with sufficient liquidity to continue to trade ? After all they did it with Air New Zealand as that was deemed to be in the national interest, so what's the difference ?

[peat]

After all they did it with Air New Zealand as that was deemed to be in the national interest, so what's the difference ?

Air NZ is the flag carrier airline for this country which isnt completely symbolic. No country wants their flag carrier down the gurgler. JAL is also currently being supported
Your example would be better served mentioning the Bank of New Zealand which was of course also bailed out - and later sold - perhaps SCF should have New Zealand in their name and that would help ;+)

So yes I'm following this thread with (detached) interest - enjoying the debate. Who will pay the corporate lawyer to defend AH if AH has no access to his means?

[minimoke]

[QUOTE=Roger;311627]I concurr, at best it looks like the reference should be 14 weeks, not days. With 30,000 investors I seriously doubt it could be done within even 14 weeks, but probably one would say you'd be reasonably safe assuming 14 months.[\quote]
Mutual Finance had 340 investors so that will give SCF depositors some kind of measure to help balance their risk return scales. The other thing we shouldn't loose sight of is the "wall of debt" other finance companies have coming up to 12 October. I wonder if, as we get closer to that date companies will be looking more closely at their accounts and perhaps deciding its really in the best interests of depositors to throw in the towel. If this occurs there will be more depositors heading into the repayment pipeline - at some point there is a risk this pipeline will get clogged making repayments likely sometime way in the future.

And it looks like we are all pretty much in agreement that we have difficulty with AH's Stat Man in isolation from other finance companies and individuals in those companies. You mention Govt ownership of SCF - could we see Kiwibank in a holding pattern just waiting to swoop. Govt intervention in Air NZ certainly added heaps to my bottom line so perhaps - I'm not sure I see the same opportunity with SCF but I keep an open mind.

[Jaa]

Roger, the difference with other finance companies is one of scale.

A collapse of the SCF/Hubbard empire would be a Lehman like event for NZ. Perhaps not that much money would end up being lost but due to the byzantine structures, sheer number of parties involved and poor record keeping, thousands of businesses and investors would not know where they stand for months or even years. Those businesses and investors would thus become very conservative very quickly and you would have a systemic event for the NZ economy leading to a recession.

[Alex]

While 8% (or 8.25%) guaranteed return offered by SCF will be attractive to many potential investors, the uncertain and long repayment time period in case the Guarantee is triggered is putting many people off. If the Government wants SCF to turn around and survive, they should come up with a certain and palatable time frame promise for the repayments to SCF investors. In return, SCF would be obliged to supply to the Government (and maintain) a verified, accurate investor information database so that if it does come to a repayment situation, it can be executed promptly.

[Enumerate]

It looks like the continual SCF dirge of doom is continuing on the thread.

Have any of you actually done any work trying to estimate the feasibility of SCF overcoming the "wall of debt"? Can you estimate how much it is? What are the monthly cash inflows required to meet this refinancing obligation?

No, I suppose it is much easier to imagine that SCF has failed and to debate the equivalent of "how many angles can fit on the head of a pin"?

Do you guys actually invest in anything? Or, are you simply happy to follow the herd?