South Canterbury Finance yesterday showed the market it was serious about its restructuring intentions with the appointment of one of New Zealand's highest profile corporate fix-it men, Sandy Maier, as its chief executive.
Mr Maier has been contracted by SCF's parent company Southbury Group Ltd, under a consultancy arrangement which sees him become the group chief executive officer and SCF chief executive officer.
A slimmed-down version of SCF is expected to list next year under the auspices of newly-registered Southbury Corporation which will also include Helicopters New Zealand and Scales Corporation.
Craigs Investment Partners broker Chris Timms said Mr Maier's appointment bolstered the company and gave some market credibility to the future of SCF.
"He has a very solid background, particularly on governance issues. But he has plenty on his plate. He will be involved in making some hard decisions for the company."
Mr Timms said the appointment is the second achievement on the list of things SCF had to do to win back market and investor support.
First, it restructured the board and put on three independent directors - Bill Baylis, Stuart McLauchlan and Denham Shale.
It had replaced former chief executive Lachie McLeod with Mr Maier and now would look to the refinancing of the company.
The reaffirmation before Christmas by credit rating agency Standard & Poor's that the company was off credit watch would have been welcomed, Mr Timms said.
There had been a loss of confidence in the company, but all of the recent achievements were a step back to regaining credibility.
"SCF needs to ensure people are willing to put money into the company through debentures.
They still have to have money coming in through the door."
Next year, SCF needed to provide some clarity on how it would react to the revised deposit guarantee scheme.
That was also something Mr Maier would have to deal with in his new role, Mr Timms said.
Mr Maier, a Harvard Law School and Yale graduate, was brought in by the Government to be statutory manager of the failed Development Finance Corporation in 1990 and since then has been a director or chairman of many New Zealand companies and organisations, including Bank of New Zealand and Mighty River Power.
The boards of Southbury and SCF said in a statement they had confidence Mr Maier's appointment would assist them in making effective decisions particularly in relation to the ongoing efforts regarding the restructuring and recapitalisation of SCF.
Mr Maier replaces Nigel Gormack, who has been SCF interim chief executive since December 1.
The company said that his role would include making recommendations to the board about financial restructuring and overseeing the loan portfolio.
Mr Gormack said on Christmas Eve that the change in ratings outlook meant the rating had gone from a one-in-two chance of a downgrade to about a one-in-three chance.
S&P said the affirmation reflected SCF's success in ameliorating specific concerns.
The company had three new independent directors, was accessing the debenture investor market and its audited statements for fiscal 2009 revealed nothing of concern.
A downgrade of the company's credit rating by S&P in August gave investors in the private placement market in the United States the right to be repaid $US100 million ($NZ142.53 million).
S&P said negative pressure would abate if SCF was able to moderate liquidity pressures, manage its credit loss experience, eliminate related party investments and successfully restructure and recapitalise its business to a level that is consistent with a BB plus rating level.
SCF chairman and major shareholder Allan Hubbard welcomed Mr Maier's appointment and thanked Mr Gormack for stepping in as CEO at short notice and seeing the company through an important transitional period which included the S&P's reaffirmed BB plus credit rating.
Current appointments
Chairman: Learning Media; Radius Property Ltd; Pathfinder Asset Management Ltd; Ngai Tahu Investment Advisory Committee; Oyster Bay Marlborough Vineyards; Directions - Understanding Governance; GEON Group.
Independent director: Click Clack Ltd; Ultimate Health Care Group; Perpetual Capital Management; McConnell Group; Fronde; Mighty River Power; Taranaki Investment Management Ltd.
Most well known for: Statutory manager and chief executive of Development Finance Corporation New Zealand (April 1990 to April 1992).
Appointed by the Reserve Bank and minister of finance to manage the insolvency of the major finance group with more than 400 subsidiaries.
A restructuring plan was accepted within six months by 99% of the institutional investors and all debt repayments were completed two years later.
More than 200 major pieces of real estate were sold and 300 lawsuits were completed or settled.
Mr Maier was awarded the New Zealand Commemoration Medal in 1990.
He worked and served as an adviser to the Reserve Bank of New Zealand through to 1995.
