South Canterbury Finance's core assets - its rural, commercial and consumer loans are to be sold to Japanese investment bank Nomura at what the Herald understands is steep discount to its book value.

The company's receivers Kerryn Downey and William Black of McGrathNicol said the three portfolios of loans with an aggregate book value of circa $123 million, together comprised the balance of SCF's "good bank'' or unimpaired loans.

While the sale price is confidential, Black said that "the sale represents an excellent outcome and is another important step in maximising the return for the Crown when combined with the other sale processes completed to date and loan recoveries made during the receivership''.

However a market source told the Herald the sale price was about $80 million.


Nomura executive Jai Rajpa said his company was pleased to have acquired the assets, "and we would like to reassure the underlying borrowers and businesses that their loans will continue to be managed from Christchurch''.

"This acquisition provides Nomura with a platform from which to lend and invest in additional opportunities in New Zealand, which has a robust, well-managed economy'', he added.

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

The receivers sold $100 million of South Canterbury's Face Finance commercial loan assets to the world's biggest finance company, GE Capital, in May.