Wellington, Jan 11 NZPA - A public listing of the extensive South Island business interests of Timaru-based businessman Allan Hubbard is among the options being considered as a follow up to a successful private placement of convertible notes announced today that raised $27.5 million.

A new parent holding company called Southbury Corporation has sold $27.5m of convertible notes maturing in October 1, 2010. The notes pay an annual interest rate of 10 percent but can convert to equity in the event of an initial public offer (IPO) of shares.

The new parent company Southbury Corp encompasses 100 percent of South Canterbury Finance Ltd, 100 percent of Helicopters (NZ) Ltd and 79.7 percent of Scales Corporation Ltd.

Southbury Corp is 100 percent owned by Southbury Group Ltd, which is principally owned by Mr Hubbard and his wife Margaret.

Southbury Corp was one of the most significant business combinations in the South Island, the company said.

The convertible note sale is regraded as the first part of a two stage capital raising. The notes were sold to institutions and private investors, who were not named. They are not linked to South Island businessman George Kerr. There was a prominent institutional investor among those who purchased the notes.

"None of them were related parties. This was all fresh capital," said Sandy Maier, chief executive of Southbury Corp and South Canterbury Finance.

He said the convertible note sale and reconfiguration of Mr Hubbard's businesses made an IPO an option and kept faith with the market.

"This better positions us to do it. It buys us time," he said.

Mr Maier said Southbury needed more capital but he could not put a figure on it.

"We have already reported losses to the market and that needs to be either made up from earnings or new equity. In our case we would almost definitely be looking for equity in some form," he said.

"It is the form and timing I am now turning my mind to, rather than saying do we or don't we," he said.

Today's statement said Southbury and its subsidiaries had consolidated total assets of about $2.8 billion and net assets of about $300m on a pro forma basis as at June 30, 2009.

The Southbury activities include commercial and consumer finance, helicopters, apple orchards, and cool stores.

"If we do an IPO then that depends on the market, and people's belief in us and we would gauge that privately before we did anything publicly," he said.

Another option was to tap private equity investors.

Mr Maier was appointed late last year and is seen as a change manager. There have also been a number of board changes.

Last year South Canterbury Finance reported the first loss in its 83-year history and a ratings downgrade by Standard & Poor's triggered a right for US investors in the private placement market to seek repayment.

Last month, there was good news for South Canterbury when S&P affirmed its BB plus long-term rating and removed it from creditwatch negative, where it was placed in September 20.

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