South Canterbury Finance Limited

[Enumerate]

Southbury Corporation Ltd, which is indirectly controlled by Hubbard and his wife, sold its 100% shareholding in Helicopters (NZ) and 64% holding in Scales Corp to South Canterbury Finance in return for 317.7 million newly issued fully paid shares worth $152.5 million and $10 million of cash on February 28.

So, Scales and Helicopters was introduced to SCF for a total consideration of $162.5m. At this time - this valuation was pilloried by the various self appointed vigilantes.

The business is now on the market as a going concern, so, about a year after it was valued for the purpose of a related party transaction, its value will be market-tested. My guess is that the goodwill in the business next time it is sold will be a lot less than $141.25m -- my guess would be more like zero or less.

Today, we have news of the sale of Helicopters ...

Helicopters (NZ) has entered into a sale and purchase agreement to sell the assets of Canadian Helicopters Group for $160 million.

HNZ has 181 employees, a fleet of 33 helicopters, and revenue of NZ$83 million and ebitda of NZ$28 million for the twelve months ended December 31, 2010. As of June 30, 2010, HNZ's 33 helicopters had an appraised value of NZ$137 million.

Sloppy writing in the NBR ... but the gist is Helicopters was sold for $160m. That is an a multiple of EBITDA of 5.7. That would have made a nice addition to the NZX.

Seems like the great tormentor of SCF and Allan Hubbard, David Hillary, was expecting a figure of less than or equal to zero.

Maybe this transaction gives pause for thought - how much of the muck Hillary was spreading around is simply horse sh$t? How much of that muck infected the tabloid business journalists? How much of this muck infected John McPherson and the Treasury boffins?

It would seem the shortest path to poverty is to let journalists and government mandarins do your thinking for you.

The only one with any redemption from this is Allan Hubbard. He introduced viable assets to SCF when he could have walked away - was criticised and slandered around the valuation - had the government usurp his lawful property rights to annihilate the value of his businesses.

Where is your case against Allan Hubbard Mr Feeley? Where is the protection of the public interest in the destruction of SCF Mr Power?

[Marilyn Munroe]

Canadian Helicopters in a statement to the Toronto Stock Exchange said that the transaction was "on a debt free and cash free basis, and is subject to customary adjustments."

For the reciever to net the complete $NZ160M sale price you would have to assume that Helicopters NZ carried no debt.


Boop boop de do

Marilyn

[Pumice]

Noted.

And also note that New Zealanders continue to borrow heavily from overseas to buy TVs, cars, overseas holidays, baches, houses, machineries and running huge bop deficits.

How do you think NZers are going to pay for all that? Leave it to the next generation?

You are probably right there Balance. As one of the "next generation" I am in no way prepared to pay for all this borrowing on top of my student loan, so have already purchased my partners and I one tickets to Aus.
Might as well use the strong NZD to get my assets out as well.

[minimoke]

For the reciever to net the complete $NZ160M sale price you would have to assume that Helicopters NZ carried no debt.

$160m less around $55m in debt apparently. Netting us $100m approx

Enumerate = The only one with any redemption from this is Allan Hubbard. He introduced viable assets to SCF when he could have walked away - was criticised and slandered around the valuation

[minimoke]

$160m less around $55m in debt apparently. Netting us $100m approx

Oops wrong!. After another payment is made to a subsidiary it looks like we'll get $55m

[minimoke]

Oops wrong!. After another payment is made to a subsidiary it looks like we'll get $55m

Oops wrong. Its seems a substantial portion will go to SCF (not sure yet where the difference goes) so it looks like we'll get less than $55m

[Enumerate]

Mini, sounds like you have been reading the tabloid business press ... since I refuse to give these mischief makers any of my money, care to detail what the latest muck they are spreading?

Surely, it is not the idiotic David Hillary assertion about the preference shares? I would hope they went to press with more substance than that - but then again, why break with tradition.

[CJ]

Receiver Kerryn Downey, of McGrathNicol, said approximately $55m from the sale price would go towards satisfying secured creditors, $50m would flow to a subsidiary that had an investment in Helicopters NZ and, of the balance of $55m, it was expected a substantial portion would flow back to South Canterbury Finance and, ultimately, to taxpayers.

http://www.stuff.co.nz/business/indu...pper-firm-sold

I assume that $50 that would flow to a subsidary is a subsidary of SCF and there that is back in the pot as well???

[winner69]

http://www.stuff.co.nz/business/indu...pper-firm-sold

I assume that $50 that would flow to a subsidary is a subsidary of SCF and there that is back in the pot as well???

While UDC will be the happiest as they get all their money back whatever happens to the balance depends on where the money go round stops methinks

Approvals needed from aviation authorities should be a given .. seeing it really is all political eh

[Enumerate]

The asset sale I am most looking forward to is the Dairy interests. David Hillary is on record that he believes that Dairy Holdings Ltd is insolvent:

One of South Canterbury Finance's largest assets is a 33.59% shareholding in Dairy Holdings Limited. This post casts doubt on the value of this asset: The most recent disclosure of Dairy Holdings Limited's books works out to about $48,900/effective hectare, and about $46/KgMS. I understand that these values appear to be about 58-71% more than the $29/KgMS and $28,523/ha similar farms are currently offered for sale at (adjusted to remove livestock that Dairy Holdings largely does not own). Dairy Holding's debt levels are 60.6% of total assets, calling into question the company's solvency.

The gist is that Hillary believes that Dairy assets were overvalued by almost 60% and that since total debt is about 60% of assets - the expected return is less than zero. (Let $x be the asset value - 0.6$x will be realised, yet 0.6$x will remain as debt liabilities - net result zero).

I hope that Hillary's absurd analysis will be exposed as nonsense by a thumping good sale of Dairy Holdings.

Following on from sale of Helicopters NZ - in which the Hillary analysis has proven to be worthless - I would hope that various tabloid business papers would cease their incessant muck racking campaign against Allan Hubbard using the "Hillary perspective" to frighten those of feeble mind and nervous disposition.

The complete tragedy is that the damage has already been done. That which was salvageable has now disintegrated.

Allan Hubbard's reputation has been tarnished by fools and their mischief - I hope to see the day in which the various distortions and lies are exposed and that Hubbard's legacy will again be an honourable one.