South Canterbury Finance Limited

[winner69]

Blogger Cactus Kate has a post giving her reaction to the freedom of information data dump by Treasury.

"I started reading Thursday's OIA dump/turd on South Canterbury Finance (SCF) and got part way through, opened a Diet Coke, stuck eye drops in my tired eyes and could not distinguish the real tears from the fake ones I had just inserted."

She is unimpressed failure to act of Treasury and senior politicians when presented with opportunities.

What we have learned since is SCF was a dead man walking for a long time, and an informed inside observer who had a duty to protect taxpayers funds should have acted earlier.

My take is that they acted with deliberate carelessness.

http://asianinvasion2006.blogspot.com/


Boop boop de do

Marilyn Munroe

Hadn't been to Kates place for a while but further down the page http://asianinvasion2006.blogspot.com/ the post Smile and Krump is a classic. Jeez that Smile and Wave guy is a bit of a sleaze ball eh .... esp the titty grab shot

[Danthetitan]

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.



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



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?

David Hillary said that the goodwill figure would be less than zero. Goodwill is the price paid less than fair value of the net assets acquired. Do you know the fair value of the net assets involved in the deal? Oh you don't? so why are you saying he's wrong?

As for the application of the proceeds to pay off third party debt, borrowings from SCF, machines from Helicopter Nominees and preference shares, how do you know if anything is left of $160m to provide a recovery on the $90.25m paid by SCF in Feb 2010? Perhaps the proceeds don't even cover the preference shares? Oh, you don't know that either?!?

And even then we're not finished really, if you want to address the issue: the 'redemption' of Mr Hubbard's 'contribution'. What about the loans and exposures to Southbury Group and Southbury Corp that, as a result of the Feb 2010 acquisition by SCF, are now total losses?

So really we should apply the $160m proceeds first to cover say half of the loss on the Southbury Group/Southbury Corp exposures (the other half for Scales Corp), leaving $80m to pay off $150m of HNZ borrowings. If you look at it this way a loss of $70m on the borrowings emerges, plus a loss of $20m on the preference shares and $90.25m on the ordinary shares.

Why don't you shut your mouth until you have access to some information with which to assess what happened in February 2010 and what happened in April 2011? Or are you jealous that Mr Hillary appears to have enjoyed access to more information than anyone is willing to give you?

[Enumerate]

David Hillary said that the goodwill figure would be less than zero.

He actually said much more than this ... that helicopters had negligible book value, that all the the transaction value was goodwill and that an actual sale would recover about zero value of this goodwill.

I can confidently claim that the Hillary analysis is completely wrong ... from beginning to the end.

... how do you know if anything is left of $160m to provide a recovery on the $90.25m paid by SCF in Feb 2010

The transaction was for SCF equity plus $10m cash. So, what you are really asking is: "Are the net proceeds greater than $10m?". Based on the Herald asset numbers, yes I am confident in this.

What about the loans and exposures to Southbury Group and Southbury Corp that, as a result of the Feb 2010 acquisition by SCF, are now total losses?

This is gibberish ... I am straining to understand what point you are making. You seem to suggesting a causal link between the offset of Southbury assets for SCF equity and the collapse in value of the SCF equity? What are seem to be implying ... that SCF would be better off by maintaining the assets in Southbury, to strengthen Southbury loan collateral ... is nonsense.

So really we should apply the $160m proceeds first to cover say half of the loss on the Southbury Group/Southbury Corp exposures (the other half for Scales Corp), leaving $80m to pay off $150m of HNZ borrowings. If you look at it this way a loss of $70m on the borrowings emerges, plus a loss of $20m on the preference shares and $90.25m on the ordinary shares.

Did you go to the David Hillary school of Finance?

You are confusing a number is issues here. For your edification, the key issues are:

1) Was the introduction of Helicopters, Scales, etc. into SCF a valid, actual equity injection? Ans: Yes it was!
2) Did the transfer of Helicopters, Scales from Southbury impair the Southbury loans to SCF? Ans: No, it did not!
3) Did the collapse of SCF equity values impair Crown asset security in recievership? Ans: Most certainly!

You need to keep these issues separate in your mind. As a test of your comprehension, here is a small homework exercise:

Were the SCF/Southbury loans impaired because they were "related party" or because factors external to the relationship were the casual factors in the impairment? Discuss. [20]

In accounting terms, what would happen if Southbury purchased its own SCF loan receivable from the SCF Receiver for $1? (Given that this, apparently, is more than the current loan recovery value, why would the Receiver refuse). Discuss. [20]

Why don't you shut your mouth until you have access to some information with which to assess what happened in February 2010 and what happened in April 2011? Or are you jealous that Mr Hillary appears to have enjoyed access to more information than anyone is willing to give you?

Manners maketh the man ...

[Balance]

NBR article today about SCF lending $13.8m to a venture capital start up, Biocorp, in which he owned 20%. Not listed as a related party loan in SCF's prospectus.

Biocorp now in receivership. Must be heart-warming for taxpayers to know the kind of lending SCF was making with tax-payers g'tted funds.

[winner69]

NBR article today about SCF lending $13.8m to a venture capital start up, Biocorp, in which he owned 20%. Not listed as a related party loan in SCF's prospectus.

Biocorp now in receivership. Must be heart-warming for taxpayers to know the kind of lending SCF was making with tax-payers g'tted funds.

Alan said he was a 'good bloke' .... shame the crisis in Egypt made this project fail

[winner69]

That other NBR story today suggests that SCF depositors money ended up at Southbury to keep the ANZ at bay .... sounds like a 'kosher' arrangement to me

[Marilyn Munroe]

"October likely for SFO to finish"

Headline from Timaru Herald article.

http://www.stuff.co.nz/timaru-herald...-SFO-to-finish


Boop-boop de do

Marilyn

[Balance]

More revelations :

According to KordaMentha, Allan Hubbard went on a frenzy of borrowing money from SCF as the crisis worsened - blowing it out to $480m in 2009.

All kosher, of course and funded by taxpayers.

[Balance]

More revelations:

Independent directors finally woke up to all the related party shenanigans and threatened to resign unless Allan Hubbard stepped down. He stepped down as the resignation of the independent directors would have put SCF under almost immediately.

This quote comes to mind - " You can fool all of the people some of the time, and some of the people all of the time. But not all of the people all of the time."

[Enumerate]

Balance, you seem to occupy a twilight world filled with suspicion and rumour. You would do well to spin yarns with Chris Lee - he also appears to have a fondness for fantasy and speculation (it is a pity consistency and fairness are not equally favoured).

Next we will hear that Allan Hubbard is actually an Illuminati Grandmaster! Given that he controlled SCF, with only the power of his mind; and was responsible for bamboosling various risk managers and loans officers and directors (or so it seems by implication from your postings) - I wonder if his cancer episode is some charade, his kidney failure some ruse; all the while he was plotting unauthorised related party transactions! His dialysis machine must, in fact, be some kind of Jedi mind control mechanism - to allow a man in his position to dupe so many paid professionals.

No, we will not be looking to Balance for any balance.