SCF's good asset realise a third of total book

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South Canterbury Finance's (SCF) receivers realised a total of $463.2 million from asset sales and loan collections in the six months ended August 31.

Thursday, October 27th 2011, 6:03PM 1 Comment

by Jenny Ruth

In their latest report, the receivers say loan book realisations, including the sale of Face Finance's loan book and SCF's “good bank,” and operating lease income totalled $371.2 million.

A separate report on Face Finance shows its sale in May 2011 to GE Capital was at or about face value – loan book and leased assets realisations totalled $105 million and other items such as interest and operating lease income took the total realised from Face in the six months to $107.5 million.

The reports don't provide any information on how much the $123 million in assets within the “good bank” were sold for. The were bought by Japan-based global investment bank Nomura.

“We just can't under the confidentiality provisions of the sale and purchase agreement disclose the sale price,” says receiver Kerryn Downey of McGrathNicol.

This is to protect the interests of Nomura in collecting the loans, Downey says. If, for example, the loans had been sold for 25 cents in the dollar, that would send a signal to the borrowers that their loans had been heavily discounted, making it difficult for Nomura to collect, Downey said. He said the loans weren't sold for anything like 25 cents in the dollar.

The report shows operating costs in the six months, including new lending of $25 million, totalled $39.3 million and that the costs of selling the assets, including Helicopters NZ and SCF's 79.7% stake in Scales Corp., totalled a further $9.5 million including $6.4 million in investment bank fees and $3.1 million in “vendor due diligence fees.”

In addition, the administration cost $7.7 million including $3.8 million in receivership fees.

The receivers say they repaid $175 million to the government in February and have paid a further $345 million to the government for the six months period covered by the report. A further $50 million was paid to the government on October 7.

The government repaid the $1.7 billion owed to SCF investors last year.

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