On the asset side of the balance sheet, in addition to the investment in South Canterbury Finance Limited, there is an $18m advance to Southbury Group Limited. This may be related to the USPP refinancing fee paid by Southbury Group Limited and funded from related party loans from South Canterbury Finance, which may have been funded through the intermediate parent:
The payments made by the ultimate parent were funded through related party loans to the ultimate parent for $20.9 million at 10%p.a.,advanced at the time payments became due by the ultimate parent subsequent to year end. (note 38, 31 Dec 2009 accounts)
The $245m carrying value of Southbury Corporation's investment in South Canterbury Finance obviously does not correspond to any value that investment presently has, nor to the book value at any time since 30 June 2009 that I know of (Southbury Corporation acquired South Canterbury Finance in December 2009, see p 4 of the 12th April 2010 prospectus 61).
On the liability side, total liabilities to South Canterbury Finance are shown as $103.9m rather than the $42.6m I was expecting. Even if you add $18m for the USPP refinancing fee financing going through Southbury Corporation, that still leaves about $40m I can't explain. However, the total between Southbury Corporation and Southbury Group was reported as $156m, leaving only $52.1m owed by Southbury Group, rather than the $98.1 I had figured. I also note that the total is consistent with why I had figured. When the Southbury Group receivers report comes out we'll have some more answers, and probably a lot more questions, too.
UPDATE: the first receivers report of Southbury Group has now been registered, and it shows that Southbury Group owes $84.7m to South Canterbury Finance, giving a total between the two companies of $188.6m, which is $52.1m more than I had figured. Unfortunately the company's accounts as at the date of receivership aren't available, with Allan Hubbard and HC Partners still working on them -- not a great look for Mr Hubbard, although he's had and got a lot on his plate.
1 comments:
This is bad news for Mr Hubbard. Many of us are very grateful for the financial assistance and advice he has provided for so many over many years. It is a shame that it appears his success has been his down fall, in that he has got so big it has got beyond him and his systems.
I note the likes of Paul Carruthers the self appointed leader of his supporters in the South Island has much less support these days, but still continues with Rosy Thomas to "thrash what appears is a dead horse".
I hope the investors many who are retired understand that despite the rhetoric of this 2, along with a handful of others, there is little chance of getting all their money back. Had the authorities not stepped in they may have lost it all. I for one are grateful for what the Govt. have done to assist.
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