In receivership

It's no surprise that South Canterbury Finance has called in the receivers - the Herald reports:

South Canterbury Finance says it is going into receivership, making it New Zealand's largest finance company failure.

It has just made an announcement to the NZX which reads:

South Canterbury Finance Limited announced today that it has been unable to complete a recapitalisation and restructure.

As a result, the Company would have been unable to certify to Trustees Executors Limited, in accordance with the terms of its debenture trust deed with Trustees Executors Limited, that it was compliant with various financial covenants under the debenture trust deed for the financial year ended 30 June 2010.

Accordingly, South Canterbury Finance Limited has requested Trustees Executors Limited to appoint a receiver in respect of the whole of its undertaking and assets, and Trustees Executors Limited has done so.

A further announcement will be made by the Company in due course.

This news is unlikely to come as a surprise to anyone, even financial illiterates such as ourselves. Whilst today's decision is generally unrelated to the SFO investigation of SCF founder Allan Hubbard, and the placing of other of his companies into statutory management, links will inevitably be made.

FWIW we don't for one moment believe that Hubbard is of the same ilk as the likes of Mark Hotchin and Eric Watson, we believe that there have been some serious errors of judgment and management prectice. This saga is going to be in the headlines for some time to come, and by-and-large, we'll let those who are more "in the know" make the informed comment.