South Canterbury on capital raising mission

South Canterbury Finance said it would attempt to raise $75 million of five year bonds with the possibility of raising another $25m in over subscriptions.

Monday, 12 November 2007

Southbury is the investment company of Timaru tycoon Allan Hubbard, and owns 27% of South Canterbury.

The bond offer is expected to be underwritten up to $75m by Forsyth Barr.

The bonds will pay interest of 10.25% or a margin of 225 basis points above the five-year swap rate, whichever is the higher.

The company announced its pre-tax net profit in the September quarter was $15.6m -- up 19% on budget and 45.8% above the same period last year.

South Canterbury said profits may ease from this level in the remaining nine months due to "current market conditions".

It forecast a net profit before tax of at least $85m for the year including the $40m capital profit on the sale of Dairy Holdings.

Chairman Mr Hubbard said on Friday South Canterbury was well positioned to capitalise on favourable lending opportunities existing in the finance sector.

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