South Canterbury Finance is signalling it will make an
adjustment to its previously reported audited accounts for
the year to June 30, 2009 when it reports an interim loss for
the six months to December 31 in coming weeks.
The company is signalling further provisioning in its interim
accounts but says new chief executive Sandy Maier has carried
out a thorough review of the business and is confident the
company can meet current and future challenges.
The business of South Canterbury Finance was cash-flow
positive and retained the confidence of its investors,
financial intermediaries and its shareholder, the company
said today.
It was now clear that further provisioning would be required
for assets previously identified as impaired.
The interim result would also be affected by the early
redemption of derivative instruments associated with the
United States private placement facility and fair value
adjustments on investments.
Adjustments may be required to the valuation and reporting of
certain items in the June 30, 2009 audited financial
statements.
The company had recently became aware that the valuation used
at June 30, 2009 for its preference share investment in South
Island Farm Holdings Ltd (SIFHL) should have been recorded at
fair value rather than cost.
An independent valuation of the SIFHL preference shares at
the date of their acquisition was currently being undertaken.
"It is noted that any difference in value arising will be
reversed in the current financial year as the preference
shares have since been redeemed for their issue price.
"The company is currently reviewing the extent of potential
prior period adjustments and at this stage believes that they
may not have a material impact on the current position of the
company." The company has new auditors.
It expects to report a loss for the six months to December
31.
The business of is cash-flow positive and retains the
confidence of its investors, financial intermediaries and its
shareholder, the company said today. South Canterbury Finance
experienced an encouraging inflow of funds from investors.
The company has averaged in excess of $1.7 million of new
investment money per day for January and its retention rate
of existing investors lifted to more traditional levels.
Investment bank Forsyth Barr has been mandated to source
funding to strengthen the balance sheet of South Canterbury
Finance.
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