About $570 million has been repaid to the Government in the wake of last year's collapse of South Canterbury Finance, which triggered a government guaranteed payout of $1.775 billion to investors and creditors.
However, it appears the final South Canterbury asset sales will fall well short of recouping the $1.775 billion. Analysts have predicted in recent months the shortfall would creep up from the $600 million estimated a year ago to $800 million or more.
The $570 million repaid to the Crown by receiver McGrathNicol is $395 million from South Canterbury asset sales, plus a repayment in February of a $175 million Crown loan to the receivers to pay creditors, which essentially secured 100% control of South Canterbury and avoided any litigation.
In a surprise move yesterday, Minister of Finance Bill English announced the asset sales of the remaining six finance companies, including South Canterbury, of the original nine which came under the guarantee scheme. The six will be taken over by a new government entity to save taxpayers $13 million.
"The receiverships of these six firms have reached the stage where all the readily marketable assets have been sold," Mr English said.
"The realisable value of the residual assets held by these companies is about $350 million.
"Setting up this new company is expected to halve the costs of managing the recovery of these assets, saving about $13 million over two years," he said.
The unnamed entity would cost $800,000 to establish.
Receivers McGrathNicol released a statutory report yesterday, for the six months ended August, outlining assets sales and costs since their appointment as receivers on August 31 last year, overseeing asset sales of South Canterbury and 13 other related companies in the wider group.
Receivers Kerryn Downey and William Black said the 14 companies had a book value of $1.9 million.
"Good progress" was being made in strategies to sell the remaining numerous assets of loans, equity investments and the outcome from investigations into pre-receivership appointment transactions, none of which were given a value.
While the remaining assets' values have not been stated, with just $570 million repaid by South Canterbury and Mr English saying yesterday the remaining "residual assets" of all six finance companies was $350 million, a shortfall can be expected.
• The Crown has made guaranteed payments of $1.6 billion to investors. Of the further $175 million loan by the Crown to receivers McGrathNicol, about $100 million was used to pay southern businessman George Kerr's Torchlight Fund No 1 LP in early-September last year, the loan carries a condition it be ranked above any claims by debenture holders.
South Canterbury investors who purchased $100 million of tradeable preference shares in December 2006 got no payout.
As things stand ...
Major South Canterbury asset sales in the past six months
• Sold: Face Finance to GE Capital, more than $100 million.
• Sold: 'Good bank' consumer, rural and business loans, valued at $123 million, to Nomura.
• Sold: Helicopters New Zealand to Canadian company for $160 million.
• Sold: 79% of Scales Corp to Direct Capital Investments for $44 million.
• For Sale: Balance of loan and property assets book, value $470 million.
• For Sale: 33% Dairy Holdings Ltd (no value estimate).
Unspecified loans to subsidiaries, related party loans and "potential litigation against various parties".
SOURCE: Receivers McGrathNicol
Receiverships taken over by Government South Canterbury Finance, Allied Nationwide Finance, Vision Securities, Mascot Finance, Mutual Finance and Rockforte Finance.
• $523 million repaid to Crown from nine receiverships, including $395 million from South Canterbury (plus a further $175 million Crown loan to receivers).
