Allan Hubbard's South Canterbury Finance finally lodged a new prospectus yesterday, ending an eight week debenture funding drought and clearing the way for the unveiling of a new cornerstone investor and a potential sharemarket float.
South Canterbury yesterday announced to the market it had lodged a new prospectus with theCompanies Office allowing it to recommence raising new funds from retail debenture investors and unlocking up to $46 million of investor cash held in trust.
The company ceased issuing new debentures on August 21 after losing its investment grade credit rating, an event that triggered the review of US$100 million of funding from US investors.
Last week South Canterbury said an agreement had been reached with the US investors which would see them repaid over the next five months.
"We have had to attend to a number of matters in recent weeks which caused the delays in the registration of the prospectus," Hubbard said yesterday.
All funds received by the company after August 20, 2009, were placed in a trust on behalf of subscribers and chief executive Lachie McLeod has been reported as saying these funds may total as much as $46 million.
The Business Herald understands investors with funds in the trust account will have the option of either investing under the terms of the new prospectus or being repaid.
South Canterbury has also been working on restructuring and recapitalisation plans and yesterday McLeod confirmed an IPO was an option being considered.
South Canterbury is working with sharebrokers Forsyth Barr and corporate advisers Harmos Horton Lusk on its recapitalisation.
He also said the company had "a few options" around potential cornerstone investors.
McLeod said South Canterbury was offering debenture investors 8 per cent for new money for terms of less than 12 months, which he believed was an attractive rate in the current market.
"That will get some interest over the next couple of days."
While unwilling to say whether he believed South Canterbury would regain an investment grade credit rating anytime soon, McLeod said he'd been in constant contact with Standard & Poor's who had been "pretty patient and good to work with over the last couple of weeks".
