16 Oct 2009

SC Finance works out repayment plan

6:55 am on 16 October 2009

South Canterbury Finance has worked out a plan to repay investors who became entitled to their money back when the company's credit rating was downgraded.

Standard and Poor's lowered the finance company's credit rating to BB+ in August, which entitled investors from a $US100 million private placement to repayment after three months.

South Canterbury Finance says it has reached an agreement in principle with the five noteholders who invested in the facility, which will see their principal repaid over the next five and a half months.

The market has been awaiting details of a major restructuring of the Timaru-based company which will see the appointment of new directors and a move to raise capital.

South Canterbury Finance says it has canceled its $100 million standby credit facility with its banks and is in the final stages of arranging a new $75 million credit facility with a new third party provider.

The company says it is moving closer to registering a new prospectus and it intends applying to participate in the Government's extended deposit guarantee scheme.