Article – Businesswire

Oct. 15 (BusinessWire) – South Canterbury Finance has negotiated to repay the five noteholders in its US$100 million U.S. Private Placement facility over the next 5 ½ months and is in talks with another party to arrange a new $75 million credit …

South Canterbury Finance to repay US investors, in talks for new facility

Oct. 15 (BusinessWire) – South Canterbury Finance has negotiated to repay the five noteholders in its US$100 million U.S. Private Placement facility over the next 5 ½ months and is in talks with another party to arrange a new $75 million credit facility and it ponders ways to strengthen its balance sheet.

The noteholders were entitled to demand immediate repayment of the notes under the terms of the USPP after South Canterbury breached some of its covenants. The finance company will get a cash gain from the unwinding of currency swap hedges related to the facility, it said in a statement.

The Trustee for South Canterbury’s debenture holders, Trustee Executors Ltd., and Standard and Poor’s have been briefed on the arrangement, it said. The finance company agreed with its banks to cancel an undrawn $100 million standby credit facility.

South Canterbury, which is owned by Allan Hubbard’s Southbury Group, is working with advisers Forsyth Barr and Harmos Horton Lusk on a restructuring and recapitalisation programme for the group, whose balance sheet was weakened by property investment and related party loans.

Among changes planned is the appointment of new independent directors to the board. South Canterbury is preparing to register a new prospectus for the issue of debenture stock and deposits

It benefits from the government’s retail deposit guarantee scheme for debenture stock and deposits that come due by Oct. 11, 2010, and intends to apply to participate in the extended deposit guarantee scheme announced by the government in August.

To be accepted into the extended scheme, South Canterbury needs to meet certain eligibility criteria and be accepted by the Secretary to the Treasury, it said.

(BusinessWire)

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