Pyne Gould Corporation has confirmed that a $100 million loan to South Canterbury Finance ranks ahead of debenture holders and says the funds are not at risk from statutory management of Allan Hubbard.
PGC’s subsidiary Torchlight Investment Group manages the Torchlight group of funds, which provide loans outside the normal banking environment to distressed companies.
The group recently increased a $75 million credit facility to South Canterbury to $100 million. PGC says it contributed $15 million, with the balance provided by third parties.
In a statement on Friday, PGC said Torchlight considered the funding facility an excellent investment.
“Our facility, being secured ahead of other charges under the Trust Deed, is particularly robust, and our investment is well secured and profitable.”
Torchlight is chaired by PGC cornerstone shareholder and director George Kerr.
Comments and questions
This feels like someone move the deck chairs on the titanic.....basically a 3rd party loan, should never have happened and the run on SCF in the next month will mean that no one will get anything.
Investors in SCF are bailing out by the hundred, this company is gone and it is just a matter of how many poor old peoples money it takes with it.
Here we go again. The old finance company switch the priorities trick. SCF solicits funding via secured debentures, then when the cupboard is full, pushes their priviledged {first ranking] status down the ladder by offering some 3rd party [often inter-related} funding in on that position.
Does the trust deed really state that secured debenture holder's 1st ranking security status can be usurped / over-riden by inter-related loans?
I doubt it, what says the trustee??
Oh "Yes" What does the trustee say? This is where the SFO should be poking it's nose in.
Ahead of debenture holders or not - doesn't matter: the debenture holders are covered by the Crown Guarantee.
Wiilliam is not correct in regard to secured debenture holders.
They are government guaranteed...every last one.......in regard to insolvency whilst the guarantee is live....As correctly pointed out by Jeoff.
For them,the torchlight fund's priority is of no consequence.
The business of dirty tricks!
Why has the business of the Securities Commission & Simon Botherways conflict of interest in non disclosure of his past relationships with George Kerr & past business with SCF been swept under the table?
This needs more publicity, because is stinks of conflict.
While it clear SCF grew too quickly; at the wrong time, & now finds itself undercapitalised, Mr Hubbard deserves more respect than statutory management. He has thrown alot of his assets in, to try & keep afloat. Now through conflict, Botherway has probably gifted Kerr with some of these at wholesale prices.
Mr Hubbard may be ultimately responsible for the position SCF now finds itself in, but Lachie Macleod is largely responsible for the grow at the wrong time. You can not entirely blame Mr Hubbard for trying to take his hand off the wheel in his late 70's. Its just he hired an someone who wasnt conservative enough; or conservative at all. I think they call it a lemon!!!
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