South Canterbury Finance asks to be put into receivership

I wonder how far the tentacles of this wee disaster will spread. I have heard the cry that people are worried about the South Island economy. You don’t get to be New Zealand’s second largest finance company and only have interests in the South Island.

Mr Hubbard and his cohorts have invested heavily in the agri/horticultural industry right throughout NZ.  A wholesale firesale of land will hurt the whole sector if only through the ol’ supply and demand equation. More land on the market = lowers the price per hectare = less equity for those who own farming land.

I wonder if Scales Corporation is will be caught in the web and is the rumour that the Aussies are looking to buy Mr Apple (just as NZ Apples growers get into Australia) true.

I am probably drilling down too soon but….

Update: Well it didn’t take long for someone much wiser than I to answer one of the questions.

Now, unfortunately, the pain will begin for the South Island rural economy.

South Canterbury owns a third of Dairy Holdings, which is New Zealand’s largest dairy farm company with 72 farms that produce more than 1% of Fonterra’s supply. It also owns fruit packaging and warehousing company Scales Corp and HNZ, which is New Zealand’s largest helicopters company.

It also has close to NZ$2 billion of loans out there in the rural economy, backing farms, contractors and small businesses in provincial centres.

Though as I have stated it’s not just the South Island that going to be hit.  It’s interesting that it’s two years since the Global Financial Crisis hit……


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