The 85-year-old company, which could well have been placed in receivership had it not been accepted into the Government's extended retail deposit guarantee scheme 13 days ago, is offering $1.2 billion in registered debenture stock and $50 million of unsecured deposits.
The $1.2 billion debenture stock is covered by the Government's guarantee scheme, while the $50 million unsecured deposits is not.
Craigs Investment Partners broker Peter McIntyre said South Canterbury was "testing the market" in offering the up to $1.2 billion in debentures and $50 million in unsecured deposits, expecting the new investor pick-up rate to mirror its debenture roll-over rate of existing investors at about 50%-55%.
"They are looking for as much liquidity as possible, in order to make repayments which are due later in the year."
The debentures have seven investment periods of three to 19 months, offering 4.5% to 8% interest, while the $50 million unsecured deposits range from three months at 5% out to 60-month deposits at 9.5%.
In mid-August last year, Standard & Poors downgraded South Canterbury's credit rating to BB+.
It ceased taking securities and withdrew its prospectus.
Since December, just over $200 million of new equity has been injected into South Canterbury, including $22 million of new equity provided recently by Torch Light Fund No 1 LP.
However, in the seven months ahead, it must have funds to deal with $1.13 billion of bonds and debentures coming due; $491 million by June and a further $640 million by October.
South Canterbury has moved away from a listing on the stock exchange, but as part of its major restructuring is dividing its assets into three distinct divisions; well-performing business, rural, consumer and plant equipment loans, a second division for non-performing and impaired loans, and the third to oversee existing investments.
South Canterbury chairman Allan Hubbard said the company had recognised impairment expenses and increased provisions totalling $209.4 million in the half-year result to December. As a result, it last week posted an audited after-tax loss of $198.6 million for the half year, a 28.2% increase on a preliminary unaudited loss of $154.9 million announced for the period in early-March.
"The silver lining from the global financial crisis will be a soundly based finance sector with integrity that supports economic growth and delivers reliable returns for investors from a competitive range of products," Mr Hubbard said in a statement yesterday.
South Canterbury chief executive Sandy Maier said the half-year results brought to account a range of impairment provisions on largely discontinued activities on South Canterbury's loan book.
"The underlying performance for the half year ... was close to a break-even result, which is relevant to any assessment of our future position."
He said indicators were showing a pick-up in economic activity and the demand for credit was good.
