Sandy Maier's comments on South Canterbury receivership

South Canterbury Finance today confirmed that it had requested Trustee Executors Limited, the Trustee under its debenture trust deed, to appoint a receiver to the Company because it had been unable to complete its proposed recapitalisation and restructuring.

Tuesday, 31 August 2010

by BusinessWire

As a result, the company would have been unable to provide the Trustee with the required certificate of compliance with various financial covenants contained in the Trust Deed in respect of the 12 month period ended 30 June 2010.

The Trustee has appointed Kerryn Downey and William Black of McGrathNicol as receivers of the South Canterbury Finance charging group.

South Canterbury Finance chief executive Sandy Maier says the appointment was inevitable when it became clear that negotiations to inject fresh capital into the business could not be completed by the August 31 deadline.

"Receivership is disappointing - and we were working very hard up to the last minute to avoid that outcome.

"At the heart of South Canterbury Finance there is a sound business supporting many successful small and medium sized enterprises. That is the core business of South Canterbury Finance and a real contributor to the economic well being of that sector of the economy."

Maier says much of the focus in the last nine months has been on re-establishing that element of the business as the "good bank", with an appropriate capital structure and focused management team."

"We had largely achieved that goal as well as taking the decisions to deal with the other elements of the business that are non-performing. Since December last year the company has appointed a new independent chairman and directors and a new senior management team to take the business forward.

"Non-core and non-performing assets have been identified and an active recovery programme has made considerable progress in realising those assets corralled in the ‘bad bank'."

New equity had been introduced in December and March to enable the restructuring of the company to proceed.

"In spite of the enormity of the issues to be dealt with, the company continued to honour its obligations to depositors up until it made the decision to request the appointment of a receiver."

"South Canterbury Finance has enjoyed the support of its many loyal depositors and new depositors who have taken advantage of the attractive deposit rates offered by the Company.

"We welcome the steps by the Trustee and The Treasury to put in place an arrangement for debenture, deposit and bond holders to be paid their full entitlement to principal and interest regardless of their eligibility under the Crown Retail Deposit Guarantee Scheme.

"This is a very satisfactory arrangement for those investors and is recognition of their support for the company."

Maier says he was aware of the enormous challenge that lay ahead when he accepted the appointment of chief executive.

"It was always going to be a big task. I knew that, and the directors did too. But we thought that at the heart of the company there was an established business with a proud heritage that was worth saving and we have combined our skills with those of the company's dedicated staff in an endeavour to achieve that goal."

Maier says he, the directors, management and staff of South Canterbury Finance will be working closely with the receivers to help achieve the best possible outcome from the receivership.

"There are many people who have gone far beyond what might be expected to create a future for South Canterbury Finance. I thank them all for their contributions and, like them, will look back on our achievements accomplished in a very difficult environment for the finance sector and the economy."

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