South Island businessman George Kerr will inject another $15.5 million into South Canterbury Finance. That takes his total Torchlight Fund investment in SCF to $37.5 million.
Last month, the global credit rating agency Standard and Poor's warned that it might downgrade SCF's double B rating by a notch or more if the company failed to lift its cash balance to at least $150 million by the end of May.
South Canterbury's chief executive, Sandy Maier, says the company is trying to meet the Standard and Poor's target, and the extra investment will improve its cash position.
On Wednesday, the company reported good progress in clawing back value from its bad loans and expressed confidence that it would not have to write down any more bad debts.
$202 million clawed back from bad loans
Earlier this year, the South Island lender split its operations into three - a finance unit holding good loans, another holding troubled loans, and an investment division that includes Helicopters New Zealand and the apple producer Scales.
The restructuring was aimed at boosting confidence in the lender and helping it to raise more than $1.2 billion from investors.
Since the restructuring, Mr Maier says, SCF has clawed back $202 million from its bad loans - or about 10% of the company's total assets.
He says that leaves about $500 million worth of loans on its bad book, most of which were lent to the property and business sectors. The firm's asset recovery team has closely examined every loan, he says, and developed a plan to recover all of them.
