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SCF's good bank sold to Japanese investment bank

South Canterbury Finance's (SCF) receivers have sold its "good bank" with a book value of $123 million to Japan-based global investment bank Nomura for an undisclosed sum.

Tuesday, August 16th 2011, 9:32PM

by Jenny Ruth

The loan book includes consumer, business and rural loans.

Receiver William Black of McGrathNicol says while he can't be drawn into a discussion about the sale price, which is confidential, a suggestion the price was at a significant discount to face value "is not correct."

However, the sale price is only part of the story. "We've been running this company for the best part of a year now and we've have significant repayments on the loan book at 100 cents in the dollar," Black says.

That will become clear when the receivers, Black and his colleague Kerryn Downey, file their next statutory report in late October or early November, he says.

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," Black says

Jai Rajpal, Nomura's head of fixed income for Asia outside of Japan, says his company "would like to reassure the underlying borrowers and businesses that their loans will continue to be managed from Christchurch."

The purchase provides Nomura "with a platform from which to lend and invest in additional opportunities in New Zealand which has a robust, well-managed economy," Rajpal says.

McGrathNicol says the business portfolio contains loans primarily to smaller, generally owner-operated regionl companies for purposes including business expansion, vehicle, plant and equipment, working capital, bridging finance to buy owner-occupied property.

The rural loans were for land use charges and seasonal funding while the consumer loans for for paying for vehicles, home appliances, furniture, holidays and weddings.

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