New Zealand

Former glamour funder Strategic Finance, whose directors include ex-All Black captain Jock Hobbs, is in the red to the tune of a shocking $195.5 million, grim news for 13,000 investors, The New Zealand Herald reported. A bleak report issued on the doomed Strategic Finance - in receivership and liquidation - by John Cregten and Andrew McKay of liquidators Corporate Finance revealed the huge deficit which they said was still subject to the cost of receivership and liquidation. The final amount might be more.

Leading political and economic commentators are reminding New Zealanders that a receivership of South Canterbury Finance could actually have positive effects for the economy, TVNZ reported. Brian Gaynor, of Milford Asset Management, said today that he was not "too concerned" about the option of a receivership through statutory management. "There's a lot of nervousness about statutory management or receivership, but the thing about this company is that nearly every investor is covered by a government guarantee so they get their money back.

South Canterbury Finance - potentially facing a $1.7 billion receivership tomorrow - yesterday remained hopeful last-minute negotiations would deliver an 11th-hour lifeline to the southern lending giant, the Otago Daily News reported. The Government's role appears increasingly crucial: to pick up part of the debt this week or let South Canterbury Finance sink and pick up the pieces in the months ahead. An outright $1.7 billion receivership of mainly southern-based loans - and subsequent asset fire sales - would have a devastating effect on the South Island's economy.

Allied Farmers is having to renegotiate the terms of its bank facility with Westpac following the receivership of its subsidiary Allied Nationwide Finance, The National Business Review reported. Allied Farmers, which took over the stricken Hanover finance loan book last December, was granted an extension on the Westpac facilities until March next year. However, the receivership of Allied Nationwide has meant that the milestones for the agreed debt terms, including debt retirement and a restructuring initiative, will require renegotiation, the company said in a statement.

The sale of financially-troubled East Coast-based vegetable processor Cedenco Foods to a Japanese company has been approved by the Overseas Investment Office (OIO), The National Business Review reported. Despite being one of New Zealand's biggest fruit and vegetable processors, Cedenco was put into receivership by ANZ National Bank last November, after it defaulted on $46 million owed to the bank and $4.7m to unsecured creditors.

The taxpayer will be called on to foot the bill for any shortfall after Allied Nationwide Finance was put into receivership late Friday afternoon, The National Business Review reported. The company – a subsidiary of NZX-listed Allied Farmers, which took over the assets and loans of Eric Watson and Mark Hotchin’s Hanover finance companies, was operating under the Crown retail deposit guarantee scheme. The company has about $137 million worth of debentures on issue. Kerryn Downey and Andrew Grenfell of McGrath Nicol were appointed receivers.

Allied Nationwide Finance says it missed paying maturing debentures yesterday and needs more time to remedy breaches of its trust deed, The National Business Review reported. The finance company said it expected to make good its investor payments today but needed an extension to a 14-day deadline set by Guardian Trust (NZGT) to comply with financial ratios. The deadline expired last night. Until yesterday, Allied Nationwide had continued to meet its obligations, including repayment of maturing debentures, the company said.

The destruction of the old Hanover debenture holders' wealth will continue if Allied Farmers' planned $19 million equity raising ever makes it off the ground, The Dominion Post reported in a commentary. The temporary delay announced this week in Allied Farmers' capital raising shows what a tightrope the company is walking, trying to placate bankers, trustees and underwriters. It has to fix its core debt problem and problems with its finance company with only limited access to new capital.

The Breakers restaurant chain plans to continue expanding, despite the receivership of two related firms, BusinessDay.co.nz reported. The franchise firm will soon open Breakers Cafe and Bar sites in Gisborne and Dannevirke, and look to head to the South Island. National franchising manager Simon Withnall said yesterday that Breakers New Zealand Franchising Ltd, owned by Mark and Penny Burt, was not adversely affected by two other Burt firms going into receivership.

Investors in failed finance company Strategic Finance are to get their first payout since the company was placed in receivership, TVNZ reported. Receivers PricewaterhouseCooper announced a payout next month of between 1.5 and 2.5 cents in the dollar to approximately 13,000 investors. Strategic Finance and its associated companies went into moratorium two years ago owing investors around $400 million dollars. In March this year, they were placed into receivership with their loan books estimated at $229 million.