South Canterbury's fluid statements show greater impairments

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South Canterbury Finance found an additional $20.4 million of expenses when it completed its first-half report, compared to an estimate last month, and revealed additional breaches of lending covenants that required a waiver from its trustee.

Monday, April 12th 2010, 11:43AM

by BusinessWire

The changes resulted in a revised first-half net loss of $191 million for the six months ended December 31, worse than the $154.9 million loss reported on March 1. The company's year-earlier loss was $52 million."There's a number of difference between the preliminary and final numbers - six or seven swings or roundabouts that are net worse," said Sandy Maier, chief executive. "It is not significant to us."'

Additional provisioning on property lending made up the largest part of revised numbers, at $118 million, out of a total $226 million. The total allowance for impairments is now listed at $245.6 million. The deterioration won't dent the firm's improving outlook, which has vastly improved with the government's decision to allow South Canterbury into the extended retail deposit guarantee.

Still, they do require the company to issue a new prospectus, which is expected as soon as today. The interim report was prepared on the basis that South Canterbury is a going concern, with enough resources to continue in business "for the foreseeable future."

The firm says it assumes roll-over of about 50% of its existing debentures as they mature and is anticipating selling about $380 million of new debentures in the next 12 months. To help finance maturity of all maturing debentures, it expects to sell non-core assets within the next nine months.

South Canterbury listed breaches to its Trust Deed related to ratios of liabilities to shareholder funds.

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