South Canterbury purchases Fairfield Finance

Media release, 9 April 2008

South Canterbury purchases Fairfield Finance

South Canterbury Finance has purchased Nelson-based Fairfield Finance Limited for an undisclosed sum, effective 4 April 2008.

Lachied McLeod, Chief Executive of South Canterbury Finance says, “The contraction of global and national finance markets, combined with rising industry compliance costs means most smaller firms are seeking support or amalgamation with large finance companies. The sale secures the investments of around 450 Fairfield Finance investors who will have the choice to transfer their investment to South Canterbury Finance. All 600 lending customers will remain with Fairfield until their loan expires or is repaid and will then have the opportunity to borrow from South Canterbury Finance.

“Fairfield has total assets of close to $18 million and includes a good mix of business and personal lending customers. The quality of the loans is similar to that of South Canterbury Finance’s loan book and is an excellent strategic fit for the group.”

McLeod confirmed that the current owners of Fairfield “will maintain an ongoing strategic relationship with the South Canterbury Finance Group to support the amalgamation and to grow the business. They believe we are the ideal company for their customers to have an ongoing relationship with.

“Over the last 18 months Fairfield’s directors have been looking for ways to provide clients with a greater level of security than they could offer but still retain their local connections. They liked the fact that the South Canterbury Finance Group is a provincial success story dating back to 1926 and has similar values to that of Fairfield. While we’re the largest privately owned finance company in New Zealand, we’ve maintained a strong regional focus and the all important personal touch. Fairfield was also impressed by our sound understanding of the primary industry in their region.”

On Wednesday last week South Canterbury Finance announced it had purchased part of the lending book of another Nelson-based company, Finance and Investments. While the two acquisitions amount to only about 1% of South Canterbury Finance’s total assets, they cement the growing strength of South Canterbury Finance’s local subsidiary, Tasman Bay Finance, which was established two years ago. Tasman Bay Finance covers the Nelson, Marlborough and West Coast regions and is about to move to high profile premises at Wakatu House in Montgomery Square, Nelson.

“We are now very well positioned in the top of the South Island business, rural and personal lending markets,” says Lachie McLeod.

South Canterbury Finance recently announced its six month results to 31 December 2007:

- a record audited first half net profit before tax of $66.1 million

- growth in assets to $1.85 billion and equity of $270.8 million

- ongoing diversity of its funding sources with a successful foray into the listed bond market late last year, a new funding line from the US private placement market and undrawn bank funding lines. South Canterbury Finance now has $400 million in cash and undrawn banking lines.

Last month Standard & Poor’s affirmed the company’s BBB- rating.

ENDS

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