SCF 'good bank' assets go to Japan at bargain rates

The offices of South Canterbury Finance in Timaru. Photo / Supplied

The taxpayer's final bill for bailing out South Canterbury Finance investors may increase yet again after its receivers sold key assets at what is understood to be a bargain price to the Japanese bank Nomura.

Allan Hubbard's South Canterbury Finance went into receivership last year, prompting a $1.7 billion call on the Government's deposit guarantee scheme.

Initial Government estimates of a $600 million net loss to the taxpayer after the company's assets were sold have proved optimistic - the most recent forecast is $1.2 billion.

The company's receivers, Kerryn Downey and William Black of McGrathNicol, said yesterday that South Canterbury's core business, rural and consumer loans - which together made up the balance of the company's "good bank" or unimpaired loans, and were valued at $123 million - had been sold to Nomura for a confidential sum.

The Herald understands Nomura paid just under $80 million, although Mr Black said that figure was wide of the mark.

He would not say whether the price was higher or lower but confirmed Nomura did not have to secure Overseas Investment Office approval, needed for transactions above $100 million.

The sale was an excellent outcome and was another important step in maximising the return for the Crown.

Finance Minister Bill English said it was yet to be seen if the Government faced a bigger loss than the $1.2 billion net loss set out in the Crown's latest update, but there was no reason yet to change that estimate.

Labour finance spokesman David Cunliffe called on the Government to reveal yesterday's sale price and say whether it met expectations.

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