The appointment of three independent directors to the board of South Canterbury Finance, including two from Dunedin, will be well received in the market. Business Editor Dene Mackenzie reports.
Dunedin directors Bill Baylis and Stuart McLauchlan, both accountants, have been appointed to the board of South Canterbury Finance, along with Farmers Trading Company chairman Denham Shale.
The three have been appointed as independent directors, easing the concerns in the market that SCF was too tightly held by the present chairman, Allan Hubbard.
The new directors are active in the New Zealand Institute of Directors at a national level and are expected to provide the governance that has been lacking in what once was New Zealand's premier finance company.
Of particular interest to the market will be speculation that both Mr Baylis or Mr McLauchlan have the ability to take over as chairman of SCF in the event Allan Hubbard retires from that role in the near future.
While Mr Shale also has experience as a chairman, the South Island networks both Messrs Baylis and McLauchlan command will be seen as an asset to SCF as it works to regain its status in the business community.
SCF recently reported a loss before tax of $63 million for the year ended June, compared with a profit of $73.6 million in the previous corresponding period.
On Thursday, SCF announced it had repaid $US50 million ($NZ68 million) of notes held by US investors and executed arrangements for new senior $75 million funding.
The facility was arranged by Forsyth Barr and had been fully drawn down.
It was provided by Torchlight Credit Fund LP which had arranged funding from a syndicate of professional investors from Australia and New Zealand.
Mr Hubbard said the appointments of the new directors were welcome and they would make a significant contribution to the company.
"We recognise the desire across various stakeholders for South Canterbury Finance to enhance its governance arrangements with the appointment of additional independent directors.
"These appointments are a further step forward in the restructuring of South Canterbury Finance."
Further announcements regarding the company's restructuring plans would be made when the company was able to do so, he said.
Craigs Investment Partners broker Peter McIntyre said the new appointments would provide good governance to SCF.
Messrs Baylis and McLauchlan would bring a "harder edge" to the board and their networks would provide SCF with valuable assistance in its restructuring.
"This is really positive news. It shows again that Dunedin has good quality business people here. SCF hasn't gone to Christchurch looking for directors," he said.
Mr Baylis, a former chairman of PGG Wrightson and Pyne Gould Guinness, would provide SCF with good advice as it continued its lending into the South Island dairy industry, Mr McIntyre said.
SCF already has links with PGG Wrightson and Pyne Gould Corporation, as it is now known.
Both Messrs Baylis and McLauchlan had demonstrated leadership skills in the past and would provide that governance for SCF in the future, Mr McIntyre said.
SCF's owner, Southbury Group, has appointed Forsyth Barr and Harmos Horton Lusk as advisers to assist in the restructuring and recapitalisation of the group.
Accredited fellow of the Institute of Directors and a fellow of the NZ Institute of Chartered Accountants.
He is chairman of Real Journeys, director of Port of Tauranga, Landcorp Farming (from tomorrow) and several private companies.
He is a former chairman of PGG Wrightson, Pyne Gould Guinness and Naylor Love.
Accredited fellow of the Institute of Directors and a member of the directors institute national council.
He is a practising lawyer and board member of listed companies for more than 20 years.
He is chairman of The Farmers Trading Company, Jenkin Timber, Eastern Hi-Fi Group, the Japan New Zealand Business Council and Mercy Hospice Auckland Foundation.
He is a director of OceanaGold and Turners Auctions.
Chairman of Scott Technology, deputy chairman of Pharmac, director of several companies including Scenic Circle Hotels, Dunedin Casinos, AD Instruments Pty and Aurora Energy.
He is pro-chancellor of the University of Otago and crown monitor to the Southland District Health Board.
Also, he is a fellow of the Institute of Chartered Accountants and an accredited fellow and member of the national council of the directors institute.
