(24 March 2010 – New Zealand) South Canterbury Finance, who has already had a considerable injection of equity from its parent company earlier this month, may need to raise more capital and sell non-core assets, according to it owner Allan Hubbard.South Canterbury Finance, who despite the increased equity still only achieved a rating of BB from Standard & Poor’s, is awaiting word on whether it has been accepted into the Extended Retail Deposit Guarantee scheme.
Mr Hubbard said that he acknowledges that the recent financial performance of the company has been disappointing and this has adversely affected investor confidence, however I remain totally committed to ensuring a successful future for South Canterbury.
Mr Hubbard also admitted that restoring the finance company may require the raising of further capital by the company and possible sale of non-core assets to ensure compliance with the new regulatory environment.
S&P credit analyst Derryl D’silva said if South Canterbury Finance has not had Mr Hubbard’s support, the credit rating would have been cut by more than one notch, pushing South Canterbury below the minimum BB rating required by the extended guarantee scheme.