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SCF loss less than first announced

South Canterbury Finance says its loss for the 12 months to June 30 is less than previously announced.

Thursday, October 1st 2009, 12:21PM

It says the group's audited net loss after tax for the financial year is $50.4 million, compared to the earlier announcement of a preliminary unaudited loss of $69 million.

"The reduction in the reported loss is mostly due to non-monetary fair value adjustments made under NZ International Financial Reporting Standards," the company says.

Loan losses and provisions against impaired loans are at a similar level to those included in  August's preliminary announcement.

The results mean that South Canterbury is in breach of covenants made with its US$100 million private placement.

Noteholders now have the right by majority vote to require repayment of the notes immediately.

South Canterbury says it is in discussions with the noteholders seeking a favorable resolution to the position and will make an announcement upon resolution.

South Canterbury Finance's owner, Southbury Group has appointed Forsyth Barr and Harmos Horton Lusk as advisors to assist in the restructuring of the group and recapitalisation of South Canterbury Finance.

South Canterbury Finance's chairman Allan Hubbard acknowledged that the result for the past year was very disappointing in an extremely challenging market. 

"While the group had to take account of significant losses and provisions on loans and investments totaling $122.9 million before tax, we were encouraged that the group made an underlying trading profit of $32.3 million in the year to 30 June."

"Completion of the audited financial statements has been a key step in our restructuring plans.  We look forward to announcing details of our plans and the appointment of new independent directors as soon as we are able to," he said.

Completion of the year end audited financial statements took longer than earlier expected as the Company's auditor was peer-reviewed following a request by the New Zealand Institute of Chartered Accountants.

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