The loss inherited by South Canterbury Finance will leave nothing for the Timaru businessman, Allan Hubbard after the Company gets restructured with the funding of Government. The announcement regarding the restructuring is yet to be made in the coming few days.
Hubbard, who was listed on NBR Rich List last year, lost his wealth worth $550 million as the Company inflicted many losses.
It has been expected that the Government will revive South Canterbury and would probably take over more than $500m of the defaulted loans of the Company. No confirmation has been made by the Government yet, but details are expected to come in near future.
South Canterbury’s total loans comprised an amount of $1.5 billion till December 31, out of which $600m accounted for bad loans. This was the reason why the Company has been looking for investors that could inject their money to save it from getting collapsed.
As per the Government’s plans, it may cover up for the bad loans at the face value of troubled loan portfolio and would pay the cash to the Company immediately. South Canterbury has already put its troubled loans under a separate administrative unit named as "the bad bank".
Anybody who will pool in additional amount of $200m will gain the ownership of the Company. The revived South Canterbury then would have $700m in new cash and about $900m to $1 billion in good loans that would help it pay back the money to investors.