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South Canterbury Finance gets loan repayment from Mercer

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 2 NZPA - South Canterbury Finance has received $1.04 million as a result of Mercer Group Ltd shifting debt owed to South Canterbury Finance to Gresham Finance Ltd, a company associated with Christchurch-based businessman Humphry Rolleston.

The stainless steel company said it has been advised that its remaining loan balance of $1.04m owed to South Canterbury Finance has been assigned by South Canterbury Finance to Gresham Finance. Gresham Finance is wholly owned by Asset Management Ltd, a company Mr Rolleston is a shareholder in.

Asset Management confirmed that the assignment meant consideration had been paid to South Canterbury Finance.

Mercer began operating in Christchurch in the 1880s and employs about 190 people in New Zealand and Australia. It is a leader in the design and manufacture of stainless steel products. Mr Rolleston is a director.

South Canterbury Finance is owned by Southbury Corp, which is 100 percent owned by Southbury Group, which is principally owned by Timaru businessman Allan Hubbard and his wife Jean. The controversial statutory management of the Hubbards' affairs does not include South Canterbury Finance.

The finance company is covered by the existing and extended Crown deposit scheme but needs depositors to keep rolling over deposits. There is a heavy amount of rollovers due ahead of the expiry of the original Crown deposit scheme in October.

Mr Hubbard has been looking for a shareholder to succeed him at South Canterbury Finance.

Mercer Group said in May that it had been advised by its bank that it was in breach of its interest cover covenant and the bank reserved its rights in respect of the breach.

The company subsequently drew down $1.5m from Gresham Finance as authorised at its annual meeting last November. It used this money to reduce bank debt.

Mercer also advised in May that its principal payments to non-bank lenders were on hold. Interest payments were being made in compliance with loan agreements.

Mercer's board is considering a number of refinancing options. The company has been reporting losses but is predicting a return to profitability in the 2011 financial year.

Mr Rolleston has more than 35 years' experience as a financier and investor with an extensive background as a director of both public and private companies.

For 15 years up until 2003, he held overall executive responsibility for all charging subsidiaries of South Canterbury Finance and held a material ownership interest in that business, according to the website of Murray Capital, an investment company he chairs.

He owns or has a shareholding in a number of private businesses operating in New Zealand including Dairy Holdings Ltd, Horticultural Marketing Ltd, Matrix Security Ltd, Salus Ltd and Spaceships Ltd.

He is currently a director of Sky Network Television Ltd, Property for Industry Ltd, Broadway Industries Ltd and Infratil Ltd and is on the board of a number of private companies.

Mr Rolleston is a fellow of the New Zealand Institute of Directors and a fellow of the New Zealand Institute of Management.

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