Core Assets of SC Finance to go Offshore

16 August 2011 - Which Way to Pay

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Core Assets of SC Finance to go Offshore

The rural, commercial and consumer loans which comprise South Canterbury’s core assets are to be sold to the Japanese investment bank Nomura. Furthering this, it is rumoured that the assets were sold at steep discount to the book value.

The three portfolios of loans with aggregate book value of circa $123 million, or so reported by the company’s receivers Kerryn Downey and William Black of McGrathNicol, encompassed the balance of SCF’s unimpaired loans or otherwise known as SCF’s “good bank”.

Black said, "the sale represents an excellent outcome and is another important step in maximising the return for the Crown when combined with the other sale processes completed to date and loan recoveries made during the receivership''. However, information regarding the details of the sale is highly confidential, including the guarded sale price figure; that said, estimates of around $80 million have been supposed.

The chief executive of Nomura, Jai Rajpa commented that aside from being pleased to acquire the assets, the company “would like to reassure the underlying borrowers and businesses that their loans will continue to be managed from Christchurch”.

"This acquisition provides Nomura with a platform from which to lend and invest in additional opportunities in New Zealand, which has a robust, well-managed economy'', Rajpa added.

South Canterbury Finance, owned by Allan Hubbard, was placed into receivership in 2010. The move called for assistance by the Government’s deposit guarantee scheme to the tune of $1.7 billion. The receivers sold $100 million of SC’s Face Finance commercial loan assets in May of this year to the world’s largest finance company, GE Capital.

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