South Canterbury Finance Limited

[winner69]

http://www.depositrates.co.nz/news/9...y-finance.html

Looks like Sandy Maier considers the efforts of the cultists "uphelpful".

Sounds a bit pissed off with our friends eh

[Lizard]

Thanks Roger... I have a feeling finding homes for maturing deposits from various fixed income sources is going to be an ongoing headache for me over next 12 months! If it was all mine, I'd happily go shares, but it's not... Will have a look at the KIPGC.

[Beagle]

You're welcome Lizard. FYI KIPGC is the only security on the entire N.Z. market of which I am aware that has no down-side, yet still maintains an upside if KIP shares rally to be over $1.20 in approx four and a half years time, i.e. if there is an eventual solid recovery in N.Z. ( I for one am not holding my breath), owning KIPGC may allow you to participate in it. (they convert at a 2% discount to the 20 day VWAP of KIP shares in December 2014 or $1.20 whichever is the lesser).

With KIP's extremly conservative balance sheet, well diversifed property holdings and well spread tenant base, I can't think of a better place to hide from the on-going effects of the GFC, whilst still giving me potential equity upside if the market at some stage in the future rebounds strongly, but if anyone has any other great low risk stratagies, I'm all ears !!

If you go to their website which from memory is www.kipt.co.nz and click on the tab about their convertible notes there's all the details in there.

[Silverlight]

Sources close to the company last week tipped a deal with overseas investors that could require as much as $600 million in taxpayer-funded sweeteners and would result in losses of about $250 million.

But should the company fail, the Government would be liable for $1.55 billion in payments to investors covered by its retail deposit guarantee, and may eventually recover less than half of that.

From a taxpayer point of view which is the lesser of two evils?

1.55bill from the taxpayer to other new zealanders, who should spend the majority of those funds reinvesting in NZ

or

600bill from the taxpayer to a foreign company, with no guarantee that money will remain in our NZ economy.

[winner69]

One day people will get it .... Alan has a failed business whatever way you look at it ... and he has to recognise it .... and yelling profanities at sweey little reporters on TV tells me he still lives in la la land

Anyway Mr Dann says Alan should apologise

Alan Hubbard owes New Zealand an apology

By Liam Dann 12:30 PM Monday Aug 30, 2010 Twitter

His supporters have written public letters to the Government calling for Alan Hubbard to be treated more fairly. Business Herald editor Liam Dann, a fellow Cantabrian, responds.


Alan Hubbard owes New Zealand an apology. Whatever happens from here it is clear that his failure as a businessman has put hundreds of millions of taxpayer dollars at risk.

In the context of the enormous constraints on public spending we face in areas like health and education this is an appalling financial mess that Hubbard has ultimately left the taxpayer to clean up.

Cries from his supporters, that if he'd been left in charge it would all have been alright, no longer ring true.

Put the probe into his personal financial entities to one side. The real story is South Canterbury Finance - the $900 million liability hanging around the taxpayer's neck. That was his baby.

Hubbard lost control of that company earlier this year after it had breached its trust deed. He was removed from the board and given the sentimental title of President for Life.
By that point the Government had already effectively decided the company was too big to fail. That is the only sane reason it could have been allowed it to stay in the government guarantee scheme when it was extended.

So Hubbard's debenture holders were given the luxury of a state guarantee - despite the fact that some of the lending this company did was every bit as convoluted and risky as that of other failed finance companies.

Sandy Maier, who has a reputation as the most skilled corporate fix-it man in the country, is now in charge and frankly appears to have worked magic just to keep it alive this far.

He divided the assets in to three piles, the working businesses, the good loans and the bad loans.

The bad loan "bank" is up to its neck in $600 to $700 million of debt on assets that may yield as little as half of that when they are realised.

When it is euphemistically said that South Canterbury failed to "stick to its knitting" it is the bad bank that people are talking about. That is also the bit that no white-knight investor wants to touch - so it threatens to sink the whole company. To put it in context, it is a bigger failure in its own right than Hanover.

The irony is that because South Canterbury is also a major lender to many productive agricultural businesses it is in danger doing far more damage to the national economy than the likes of Hanover ever could.

It is a great shame that Alan Hubbard - and the South Canterbury management team he put in place during the last days of the property boom - did not stick to their knitting.

But they didn't and they were caught out like everyone else. It is a tragedy that fantastic business story that is Hubbard's career should be so tarnished.

Alan Hubbard is clearly a nice man. It would be surprising if the Serious Fraud Office finds anything of a criminal nature in his accounts. He appears to be a man of honour and integrity.

If this is the case and he wishes to salvage what is left of his reputation he needs stop being so proud and accept what has happened.

His supporters are doing him no favours by encouraging him to fight back at the Government and the designated officials. They are working now to do what is best for the taxpayer.

As it becomes clearer just what this business collapse will cost each of us we can expect public anger to grow. Support for Hubbard already looks parochial. As the embattled community of Timaru continues to back him it will become embarrassing. If Hubbard really cares about his community he should take responsibility for this mess and spare them that.

http://www.nzherald.co.nz/business/n...ectid=10669903

[winner69]

SCF has a AAA rating for investors in secured debenture stock and is considered to be in the top three or four safest finance companies in New Zealand. The topic here is [u]not</u> about the lending side of the company, but whether it would be a good company in which to have an [u]equity share</u>.

Certainly there are a few 'dodgy' companies which may yet 'fall over' but this is unlikely to be one of them. I think it is a little unfair to 'tar' all finance companies with the same general 'brush' of being risky in the manner rmbrave, Capitalistand a few others are willing to do. The gearing of SCF is in much better shape than most finance companies and it has a track record from 1915 of being run as a conservative 'money machine'.

I would certainly put it on the same footing as Marac (which is also in the top three or four in ratings) and that company is one of the prime reasons PGC (the holding company)is a popular share. I think Snapperhas the right handle on things.

If it does float, I would consider it to be fortunate that investors would have a chance to participate in a company in the finance field which historically has a proven solid background. After all, there are very few companies left in the NZX which remain "New Zealand owned and operated". Look at the banks - most are Australian and although very good investment prospects, leave a lot to be desired when it comes to the aspect of taxation of dividends.

It would be healthy for the NZX to have another share market opportunity such as SCF.

I was wondering how this thread started .... way back in 2005 Slelessi posted this ... and was quickly chastised by Capitalist for ramping .... ha ha

Of course the float didn't go ahead ... maybe cause Alan knew things mightn't stand up to public scrutiny .... but that was before the GFC anyway but the foundations of many finance houses were starting to crumble anyway

Amazing how things ahve changed in 5 years eh .... a AAA rating to going broke

[minimoke]

http://www.depositrates.co.nz/news/9...y-finance.html

Looks like Sandy Maier considers the efforts of the cultists "uphelpful".

he is now saying the govt is not in any kind of discussion with the Company about a bail out option. Now he tells us. Quite happy to let that rumour run its course. Looks like Sandy is tidying up the loose ends before the Receivership / default event is announced. No longer looking at days - it'll all be over in hours.

[minimoke]

Liam Dann is right ... [I]

Can someone remind me how much wealth has TEL destroyed again? Or other finance companies?

Or we might wonder how good govt itself is good at destroying wealth. AIA took a massive hit under Labour when the sale was blocked.

[Balance]

Liam Dann is right ... The bad loan "bank" is up to its neck in $600 to $700 million of debt on assets that may yield as little as half of that when they are realised. ... then its "only" 300-350 million that taxpayers are up for.

Can someone remind me how much wealth has TEL destroyed again? Or other finance companies?

And how much wealth did TEL created prior to 2006?

[Capitalist]

he is now saying the govt is not in any kind of discussion with the Company about a bail out option. Now he tells us. Quite happy to let that rumour run its course. Looks like Sandy is tidying up the loose ends before the Receivership / default event is announced. No longer looking at days - it'll all be over in hours.

Yep. He had to be careful not to create a run didn't he.

It annoys me when people blame govt - as Winner said SCF went from AAA to broke in 5 years. That's not govt's fault.