South Canterbury Finance Limited

[Enumerate]

I wonder, with the new Fonterra trading rules coming up, if Dairy Holdings Ltd could settle some of it's debt in terms of a sale of Fonterra shares? Anyone know the details here?

[minimoke]

Don't we all know exactly how long?

Govt Guarantee - Clause 2.2 - Payment within 14 days

Alan.

I hope we don't need to find out but but Treasury say, in their Q&A section at 2.6 "There is no fixed period for repayment, but payment to eligible creditors will be made as soon as practicable once we receive a correctly completed notice of claim and have assessed your eligibility and the proper amount to pay."

No doubt the solicitors will have fun working out what "14 days" means and what "indebtedness" means.

What say a default event occurs on 30 December - a day before the quarterly interest is due to be paid. Investors won't get interest indebtedness for that quarter (because the extended guarantee doesn't cover interest), and say your deposit indebtedness wasn't due to be paid until 31 December 2011 when do you think you will get paid?

Remember Vision Securities. They went bung on 1 April, Here is what treasury are saying to depositors today:

The Treasury has started to repay eligible Vision Securities depositors. Key steps in the process are:

Letters have been sent to all depositors to confirm their contact details and the type of claim form required.
If you are a Vision Securities Depositor and have not yet received a letter from the Treasury, please phone the Vision Securities Claims Helpline on 0800 650 034.
Following confirmation of details, the Treasury sends the appropriate claim form directly to depositors to complete and return. Claim forms have been sent to approximately 70% of eligible Vision Securities depositors.
Claim forms sent back to Treasury are assessed.
Please note that Treasury can't pay you if the form is not correctly completed, for example, if:
Information is missing from the forms.
Required questions are not answered.
Certified copies of required documents are not provided.
Following receipt of properly completed claim forms, Treasury assesses the claims and makes payment to eligible depositors.
The Treasury has started making payments to eligible Vision Securities depositors.
If the form is not correctly completed, Treasury will send the forms back to you again for you complete properly.
If this happens, you may need to have another statutory declaration made and, inevitably, processing of your claim for repayment will be significantly delayed.

[winner69]

Holy **** .... what a pain if everybody needs to make a 'statutory declaration' .... does that mean going to a JP or something?

If SCF go broke this could oslve the unemployment problem ... would need heaps of new people to get all the paper collected

But then 14 days is not too long to wait

[winner69]

As minimoke says Treasury seems to work to a different timeline - this from a media announcement re Vision .... Eligible depositors with Vision Securities will be contacted within six weeks and provided with information about how to claim under the terms of the Crown retail deposit guarantee.

http://www.treasury.govt.nz/publicat...media/01apr10a

But maybe SCF do have separate rules because they are so big and a vital cog in the economic wellbeing of so many

[winner69]

See you would need to provide certified copies of passports and all that sort of stuff ..... anybody actually gone through the claims process for real yet?

[minimoke]

H
But then 14 days is not too long to wait

If SCF have 30,000 depositors and there are 150 JP's in Timaru - thats 200 Statutory Declarations each. At 5 minutes a pop thats 16 hours each or working two full time days. Take three days for the mail (those Cobb and Co horses take a while) you're down to 9 days for Treasury to get your money to you. Thats 70 extra people Treasury will need. If you see a flurry of activity at the AWF office in Wellington you'll know somethings afoot!

[POSSUM THE CAT]

Maybe they would be better to nationalize SCF Now and be done with it.

[minimoke]

So heres an example of some of the troubles. Mercer Group is in the poo. They had $11.4 in borrowings due over 12 months and breached their banking covenant. They owe SCF some $1.4m but that debt has now been taken over by Humphrey Rollestons Gresham Finance.

Trouble is AH is the major shareholder in Mercer so he presumably can't help bail them out at the moment. Luckily, perhaps Rangitata Plains Farms is also a substantial holder in Mercer - except AH own RPF. Or what about Jones Macky Limted shareholding - nope: also owned by AH. James Urquart may help Mercer - except he's already taken a bath on EHF

[Enumerate]

So heres an example of some of the troubles.

I agree.

With SCF in trouble, there is one problem to be sorted.

With SCF in liquidation, there will be a regions worth of trouble to be sorted.

[winner69]

Haven't heard much about Sam Kelt lately except Kelt Capital pulling is sponsorship of one of NZ;s richest races

Bet a lot to be untangled in that web as well