Hubbard's Southbury Corp. already has poured two profitable businesses, worth $152.5 million, in to South Canterbury in exchange for additional shares. The move to bolster the finance company's equity capital wasn't enough to placate Standard & Poor's, which cut its rating to BB and put the outlook on CreditWatch Negative.

"I acknowledge that the recent financial performance of the company has been disappointing and this has adversely affected investor confidence," Hubbard wrote in a letter to investors that was released to the NZX. "But I remain totally committed to ensuring a successful future for South Canterbury."

Restoring South Canterbury to being a leader in the sector "may require the raising of further capital by the company and possible sale of non-core assets to ensure compliance with the new regulatory environment," Hubbard said.

Yields on the company's NZX-traded bonds underline the dilemma the company faces if it can't gain admission to the extended scheme. Its 2012 bonds, which fall outside the scheme, are yielding 37%, while its June 2011 bonds, which fall outside the existing guarantee scheme but would be within the extended scheme if the company qualified, are yielding 25%. The bonds maturing in October this year - well within the guarantee, are yielding 8.25%.

South Canterbury's first-half net loss was $154.9 million, reflecting a provision for losses on impaired or non-performing assets of $180.3 million.

S&P credit analyst Derryl D'silva said if not for Hubbard's support, the credit rating would have been cut by more than one notch, pushing South Canterbury below the minimum BB rating required by the extended guarantee scheme.