SCF customers' credit lines safe: receivers

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Receivers for the failed South Canterbury Finance moved to reassure the company’s borrowers that their funding support is confirmed as long as they "meet the SCF Group’s lending criteria."

Receivers Kerryn Downey and William Black, of advisory firm McGrathNicol, also reported ongoing interest from potential buyers of SCF’s assets.

"These enquiries are being recorded in registers of interest held by the Crown and the receivers," their statement said.

Advanced discussions were under way with up to three bidding parties before trust deed exemptions expired for SCF on August 31, triggering receivership and a government bail-out under the retail deposit guarantee scheme.

The government also moved to buy out higher-ranking claims, in order to be "first in line" as creditors in the receivership.

Since then, many of SCF’s South Island individual and corporate borrowers will also have been affected by the Canterbury earthquakes, which occurred just 10 days after the SCF collapse.

"Over the past week, SCF Group senior management and staff have contacted the SCF Group's major customers to determine their funding requirements and make the necessary arrangements," the receivers said.

"Confirming the continuity of funding lines for performing customers will help maintain the Group's ongoing business operations and preserve the value of the Group's assets.

"We recognise the importance of stable ongoing funding to SCF Group's customers and we want to reassure customers that funding will continue where lending criteria are being met."

Since their appointment, the receivers said they had "worked closely with SCF senior management and staff to evaluate the key issues facing the SCF Group, and have made considerable progress in stabilising the Group's operations under the receivership."

- BusinessDesk