Good and bad news on fin coys
News on finance companies was totally mixed bag yesterday with two companies reporting strong results, one receivership and news another firm may have gone under.
Thursday, August 30th 2007, 7:11AM
SCF reported its pre-tax profit increased from $39.3 million to $50.6 million for the year ending June 30. More details of these results are in depositrates.co.nz. There are reports today that PricewaterhouseCoopers has been appointed receiver to another finance company, however it isn't publicly disclosing which one.
Depositrates.co.nz will update readers on this story later today.
Meanwhile Propertyfinance has confirmed its receivership.
Propertyfinance is one of the smaller companies with 4000 investors and around $80 million in debenture stock. It had put a rescue package to its trustee, which essentially involved deferred payments to investors.
However that plan was rejected.
Propertyfinance's collapse is different to other failures as it has good quality assets but suffered a funding squeeze brought about through by developments in the credit market.
Under its model it securitised loans, essentially selling them to other investors, however the market for these assets has dried up.
South Canterbury Finance chief executive Lachie McLeod says other finance companies will struggle with liquidity issues over the next four months.
"Some of these companies will consolidate or progressively wind down their loan books, due to the difficulty of attracting investment funds," he says.
"These companies, many of which are well managed, simply do not have scale or diversity to obtain an investment grade credit rating."
At the same time he announced that SCF had secured a $150 million funding line from two banks.
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