Surety cost SCF millions a month

The Government guarantee could have cost South Canterbury Finance millions of dollars a month had the lender remained a going concern.

Institutions in the retail deposit scheme must pay a monthly fee determined by the number of investors or deposits, and by the company's credit rating.

SCF chief executive Sandy Maier said if the finance company had carried on trading it would have paid "several million dollars a month" to be part of the guarantee, instead of the estimated $4.8 million it paid to be in the scheme for 16 months.

"We were paying around $300,000 a month over 16 months. Most of that was under the old scheme but under the new scheme we would have been paying several million a month if we had carried on."

Mr Maier dismissed suggestions an offer was on the table for $2.65 a share, which would have equated to $1.57 billion.

The New Zealand Herald reported yesterday that Mr Maier was seen on an Air New Zealand flight looking through a sale and purchase agreement from businessman Duncan Saville, who was prepared to offer $2.65 per share.

"The prime minister has been saying for days the shares are worth nothing, they are under water. I can categorically say no discussions have been held about buying shares," he said.

He was still hoping SCF could be sold as a going concern.

"Right now the store is closed so to speak but we could open it today and it could operate."

- © Fairfax NZ News