South Canterbury Finance's impairment provision may increase further as the company's auditors are still reviewing those figures a week after the firm published preliminary financial statements.For the six-month period to December 2009, South Canterbury Finance and its charging subsidiaries (referred to as the charging group) made provisions of NZ$178.5 million for losses on impaired or non-performing assets. The huge provisioning led to the group reporting an unaudited loss of NZ$155.7 million."The Company's auditor is still reviewing the financial statements for the six-month period including, in particular, the level of provisions made by the company for its preliminary announcement," South Canterbury Finance said yesterday. The audited result is expected to be available by March 31.The company's directors, however, believe the final loss may not be "materially different" from the unaudited preliminary loss.Still, the company emphasised that if there are any material changes to the provision "as a result of the completion of the audit of the charging group's financial statements for the six months to 31 December 2009, the loss for that six months period would also change." Separately, the company said the Trustees have waived any breach of the financial covenants that may have existed between December 2009 and this month, in addition to giving waivers to the two specific covenants the company breached when it received fresh capital infusing.The first breach happened because the total book value of the equity securities held by members of the charging group was 116.7 per cent of the charging group's shareholders funds, when it was not permitted to exceed 100 per cent. The company plans to comply with this covenant by selling securities held by it or by raising additional capital.Raising more capital will also help remedy the breach of a second covenant when the charging group's total exposure to Helicopters (NZ) increased to 50.9 per cent from a maximum allowable 35 per cent. The other option to fix this is to reduce overall exposure to Helicopters (NZ).South Canterbury Finance has already hired Forsyth Barr to find capital and funding solutions for the company. The company may need more capital infusion to prevent its rating from getting downgraded further. Standard & Poor's recently cut the company's rating to BB from BB+ and also put the rating on Credit Watch with negative implications, warning that a downgrade will follow if further capital is not injected or if liquidity and asset quality worsen further.