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South Canterbury Finance receivers sell $100m in loans

[UPDATED] South Canterbury Finance's (SCF) receivers have sold more than $100 million in commercial loan assets to GE Capital's New Zealand equipment finance business.

Monday, 23 May 2011

South Canterbury Finance's (SCF) receivers have sold more than $100 million in commercial loan assets to GE Capital's New Zealand equipment finance business.

The loans were held by SCF subsidiary Face Finance which primarily focuses on 'big ticket' financing in the transport and infrastructure sectors and which operated on a largely stand-alone basis.

"The sale to GE Capital is a very pleasing outcome and represents a key milestone in the realisation of SCF's loan book assets," say receivers Kerryn Downey and William Black of McGrathNicol.

"We believe the acquisition by GE Capital will provide increased certainty for Face Finance's customers."

They say GE participated in a competitive sale process with Deutsche Bank acting as sale advisor to the receivers.

The US-based GE says the deal will consolidate its position as a specialist financial service provider, complementing the equipment finance it already offers in New Zealand to the construction, transport, forestry and aviation industries.

"This transaction builds on our history in New Zealand and will continue the strong growth our business has experienced over the past few years.," says Michael Booth, GE's New Zealand general manager for equipment finance.

SCF went into receivership in August 2010. The loan book sale is the third major asset sale since then. Earlier this month, the receivers sold SCF's 78.7% stake in Scales Corporation for $44 million and in April they sold Helicopters New Zealand for about $160 million.

The government, which has already paid out $1.7 billion to SCF investors, now expects its retail deposit scheme will cost it about $1.2 billion, largely because of lower than expected related party loan recoveries from the receivership of South Canterbury Finance.

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