Businesses, farmers and homeowners with mortgages to South Canterbury Finance are likely to see little immediate change to their debts as receiver McGrathNicol begins unravelling the company's loan book.
In a brief statement, McGrathNicol, which was appointed receiver by South Canterbury's Trustees Executors yesterday, said it had taken possession and control of all assets and undertakings of South Canterbury.
During coming weeks, it would review the status of companies and immediate priorities, alongside Treasury and the trustees, to ensure investors "will be paid out as quickly as possible".
Iain Nellies, of Insolvency Management Ltd in Dunedin, said McGrathNicol had several options to consider in the weeks ahead, but people owing mortgages and loans to South Canterbury would not see any changes.
"I would expect business as usual for those people.
"They will have contracts and so long as they are sticking to the terms and making repayments on time, they won't see any immediate change," Mr Nellies said.
The receiver had several options, including selling the loans to another party, which would likely realise less than they were worth, or the receiver could decide to let the loan contracts run to their full term - a scenario likely to take several years, Mr Nellies said.
"Depending on how quickly they want money back, the receivers wouldn't want to fire sale everything, as that would place a hell of a pressure on the economy as a whole."
As well as swiftly stepping in to pay investors of South Canterbury Finance $1.6 billion yesterday, the Government also immediately provided a $175 million loan to the receiver, for payment to preferential creditors.
Mr Nellies said this would likely go to IRD and staff.
George Kerr's Torchlight Fund, which had lent South Canterbury $100 million, was given a prior charge over all other assets at the time and ranks ahead of debenture holders for payment.
"The receivers are effectively working for the Government now," Mr Nellies said of the $175 million loan.
Mr Nellies said actual company assets, such as properties, may be held for some time, as staff assisted the receiver in the months ahead.
