Allied Farmers tries to cobble together loan repayment as liquidation hovers
Allied Farmers, which reported a further $4.1 million writedown on its ex-Hanover Finance assets last week, is trying to cobble together a loan repayment by the end of the day in a bid to stave off a potential liquidation.
The Hawera-based company is in talks with various parties, including secured lender Crown Asset Management on a repayment proposal to a different creditor, who called on a loan to be paid by the end of today. Allied owes $540,000 including interest, secured over a $3.75 million loan asset that it hasn't been able to realise.
"The creditor has said that in the absence of an acceptable arrangement, it may shortly move to the next step," the company said. "The next step would be applying for orders appointing liquidators to ALF (Allied Farmers) and AFIL (Allied Farmers Investments)."
The call on the loan was made last month, and was followed by the Inland Revenue Department making a statutory demand for $3.7 million in unpaid taxes.
Allied is trying to rebuild itself after its disastrous acquisition of financial assets from Hanover and United Finance for $394 million in 2009. It has ring-fenced what's left of the assets in its Allied Farmers Investments unit, which had assets of $25.7 million, according to its first-half accounts.
The shares were unchanged at 1.9 cents today, valuing the company at just $1.7 million.
(BusinessDesk)
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Comments and questions3
Poor ol', Stevie: He's had to learn the hard way: that the so-called $395m in "assets", Allied Farmers purchased from Hanover and United Finance, were never secured against first mortgages. But, rather, were made up of a motely combination of caveats and/or unregistered mortgages back to Hanover and UF, and promissory notes from the borrowers; who were stretched out like rubberbands.
Shame, also, the investors didn't know of this as well, when they approved the moratorium in 2009, and the sell-off to Allied Farmers.
Surely the directors will be called to account for their decision to buy the Hanover assets. It would be interesting to know who if anyone gained by brokering this deal, Its a shame as Allied has been pulled back from death before, to see it sink would be a shame and all directors for the past 5 years should be accountable.
One word: Eureka.