South Canterbury Finance Limited

[minimoke]

... and a six month PE loss of $191M and $55m in equity. And still the tax payers are going to provide support via the Extended Deposit Guarantee.

Well I can't keep up. Today, just a few days later, the loss is now apparently $198.6m and equity is at $47.7m. How is it the Auditors can find another $7.6m of losses over a weekend yet SCF can't keep track of it themselves. It was only back in early April they thought the loss would be $154.9m. Thats another $44m in losses that has just appeared from nowhere.

[POSSUM THE CAT]

Minimoke It is my opinion the extended Govt. guarantee was the lesser of two evils. Otherwise SCF would collapse before the end of the present guarantee triggering massive Govt payments to depositors.

[minimoke]

Minimoke It is my opinion the extended Govt. guarantee was the lesser of two evils. Otherwise SCF would collapse before the end of the present guarantee triggering massive Govt payments to depositors.

Yes, I suspect you are probably right. It looks like Treasury is taking a pragmatic appraoch and trying to minimise exposure to tax payers. It looks like they figure they are up for $849m if SCF goes belly up pre October. So how can this postion be improved - well, by seeing SCF survive past 12 October when coverage is reduced and the deposit taker levy increases. It looks like a managed exit strategy for SCF - but not one they are telling people about.

[Romulus]

Spot on Possum, the Govt needs SCF to get pass 12 Oct 2010,given the haste in which the original Gtee was drawn up and it never envisaged covering the current sencario. I still think SCF can go under before Oct 2010 due to over 1.2b due before that date and very little prospect of any funds of that level coming in. Remember all bonds are covered except SCFHA (equity), so a lot of water yet to flow under the bridge.

[winner69]

A few weeks in one of their announcements they said equity now stands at $256m (or something liek that)

Today they say -

'Total equity in South Canterbury Finance is now $206.6 million, comprising
$158.9 million of new capital subscribed in January and February and existing
equity of $47.7 million as at 31 December 2009. The expected capital
contribution announced by the Company on 31 March 2010 resulting from
Torchlight Fund's proposed subscription for convertible notes in Southbury
Corporation Limited will further enhance South Canterbury Finance's equity by
at least $22 million

Wonder what the number will be next month?


Hope for the sake of the country (ie taxpayers) and punters they don't go broke

But it seems to me it would be better if the government took over NOW as managers and then when the much vaunted 'silver lining from the global financial crisis will be a soundly based finance sector with integrity that supports economic growth and delivers reliable returns for investors' actually happens the taxpayer can get the reward for underwriting the rsik brought on by incompetence and all that

I'm all for that

[Balance]

Pragmatism wins the day.

Let's hope SCF makes the best of the lifeline and survives.

In fact, prospers so that NZ can prosper too with more NZ owned financial institutions prepared to lend to NZers.

And to Hubbard - no more treating SCF as your private piggy bank.

[Snoopy]

And to Hubbard - no more treating SCF as your private piggy bank.

Of course there are two ways to tackle the private piggy bank problem.

1/ Take the Piggy Bank off the Hubbard mantelpiece.
2/ Remove Hubbard's need by removing his pennies!

Perhaps both solutions will come into play?

SNOOPY

[QOH]

on TV1's midday news, the phones were running red hot at SCF this morning with investors rushing to invest since the new prospectus has been released. Another one for the Tui's billboard?

[winner69]

on TV1's midday news, the phones were running red hot at SCF this morning with investors rushing to invest since the new prospectus has been released. Another one for the Tui's billboard?

Jeez if SCF phones are running hot then the main link to Chris Lee's in Paraparaumu must have blown up with the locals telling him to reinvest their money as well

Maybe 1/2 billion invested with them today?

[winner69]

Jeez if SCF phones are running hot then the main link to Chris Lee's in Paraparaumu must have blown up with the locals telling him to reinvest their money as well

Maybe 1/2 billion invested with them today?

Finger in the dyke seems appropriate diescription