Deposit rates news briefs
Minister speaks on finance company failures, Likely suitor for Superbank, Boardroom battle at Dorchester, Dominion extends credit lines.
Tuesday, July 25th 2006, 7:32PM
Credit ratings for finance companies is one of the issues that will be raised in a Ministry of Economic Development discussion document next month.The paper is part of the he Review of Financial Products and Providers has been underway since March 2005.
While the paper is expected to be controversial, don’t expect the government to push for compulsory ratings.
The discussion documents are not a reaction to the recent collapses of National Finance 2000 and Provincial Finance,” Commerce minister Lianne Dalziel told Good Returns.
There is no evidence at the present moment that the failure of these finance companies is a manifestation of a systemic problem within the industry.”
Board battle at Dorchester
Three well-known businessmen attempting to force their way on to the board of listed finance company Dorchester Pacific.
Those chasing a position are Shareholders' Association chairman Bruce Sheppard, former Dorchester managing director Brent King and Rod Petricevic, managing director of 20% Dorchester shareholder Bridgecorp.
The ownership of the company and board have been in the news over the past year. At last year's annual meeting meeting, chairman Murray Radford and long-serving director Sir William Birch were both voted off the board.
Also Bridgecorp acquired a stake in the business from King but that deal was unwound by the Securities Commission.
The annual meeting is scheduled for August 23.
Superbank decision due
Superbank is due shortly to be sold or closed due to losses and its chief executive James Munro is reported to be on "gardening leave" for two weeks.
The bank's liquidity is not in question but it has chalked up losses of $40 million in the three years since it opened.
While Rabobank has been suggested as a possible suitor for Superbank, there are indications Kiwibank is the most likely buyer of the business. Kiwibank operates in both the lending and deposit taking area, while Rabobank does not do residential lending.
Also Kiwibank has shown itself to be acquisitive, buying into New Zealand Home Loans earlier this year.
Dominion Finance extends lines
Dominion Finance Holdings and its operating subsidiaries Dominion Finance Group and North South Finance have negotiated increased bank lines to $90 million.
The major part of the funding, $70 million, is from BOS (Bank of Scotland) International (Australia) and the balance from ASB Bank.
The facilities, which are secured by security stock to be issued by each of DFG and NSF, will rank pari passu with ordinary debenture stock and have been arranged to complement the two companies’ existing debenture stock funding for the benefit of future growth and to maintain increased liquidity levels.
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