Wellington, Aug 27 NZPA - The future of South Canterbury Finance should soon be clarified after a trading halt was placed on the finance company's securities today, ahead of an announcement expected early next week.

Timaru businessman Allan Hubbard is president for life of the finance company, one of the biggest non-bank institutions in New Zealand.

South Canterbury Finance is not affected by the statutory management of Mr Hubbard's affairs but the Government is a key player in its survival because it is covered by the Crown Retail Deposit Guarantee Scheme.

South Canterbury has been searching for a new major shareholder and it has waivers from breaches to its trust deed until August 31.

The interest.co.nz website reported that a recapitalisation proposal was now sitting with Treasury and cabinet would consider the proposal on Monday.

Torchlight, the Pyne Gould Corporation-owned property funds manager run by South Island businessman George Kerr, earlier abandoned a plan to inject equity into South Canterbury Finance and instead increased lending. It is believed that the equity investment did not go ahead because it had to be approved under the deed for the deposit guarantee scheme.

Last week Standard & Poor revised the South Canterbury Finance's long-term credit rating downward to CC.

South Canterbury Finance chief executive Sandy Maier said then that good progress was being made on the recapitalisation of the business with the target of making an announcement on August 31.

South Canterbury Finance has been operating since 1926.