Allied Nationwide scrambles for funds after default
Allied Nationwide Finance has been placed in receivership. (See updated story here)
EARLIER STORY: The company says it missed paying maturing debentures yesterday and needs more time to remedy breaches of its trust deed.
The finance company said it expected to make good its investor payments today but needed an extension to a 14-day deadline set by Guardian Trust (NZGT) to comply with financial ratios. The deadline expired last night.
Listed securities of both Allied Nationwide and its parent, Allied Farmers, were placed in a trading halt late this afternoon pending further announcements.
Until yesterday, Allied Nationwide had continued to meet its obligations, including repayment of maturing debentures, the company said.
“However, as the capital and funding initiatives under consideration by the Allied group require third party commitments and NZGT approvals which had not been received by last night, it has transpired that ANF did not pay debenture maturities due for payment yesterday," the company said in a statement.
"Allied Nationwide expects to complete an initial transaction today that will result in payment of debenture maturities now due and has requested Guardian Trust both consent to this transaction and to provide a short extension to the deadline originally imposed.”
Allied Nationwide is a subsidiary of NZX-listed Allied Farmers Limited, which bought the assets of the Hanover group of finance companies in a debt-for-equity deal last December.
Allied Farmers recently put off a $19 million capital raising plan due to the issues raised by Guardian Trust.
The parent company said it was considering moving some of the Hanover-acquired loans over to the finance company to try to solve its capital problem.
However, those assets – originally thought to be worth $396 million – are now valued at just $94 million.
Allied Farmers is forced to continue funding its finance company subsidiary but has its own problems, including repaying core debt of $19 million to Westpac.
Allied Nationwide has about $137 million worth of debentures on issue.
The investments are covered by the Crown retail deposit guarantee scheme until October 12.
Standard & Poor’s last week lowered Allied Nationwide’s credit rating from B/B to CC/C and said there was a "strong prospect" that Allied Nationwide could default on its obligations within six months.
Back to home
Back to top
Print
Latest
NBR SERVICES
SUBSCRIPTIONS
Sign up for NBR subscriber content or email alerts
Comments and questions26
This sorry saga looks to be coming to a close.The Chairman, CEO and Board should be hanging their heads in shame at the destruction in value in this Group.
Those Hanover boys are sharp.
They got off scott free with millions and millions in one of the major transfers of wealth between the mums and dads and the sharp suits.
Still Bruce Shepard told them to put Hanover into receivership and the liquidators could have clawed back at least $100m+ so they only have themselves to blame.
It is obvious the end is nigh. I wonder if the 'astute' Mr Lee still stands by his belief and affirmation of the management of Allied Nationwide.
There is no doubt that the problems that exist have been caused by the lack of governance and management of the business and this will unfortunately have a negative impact on so many.
May they all hang their heads in shame as they exit the building.
The walking dead....Dragging matters our with moratoriums and stcking plaster options are just not good enough.
Investors have been robbed blind over the past few years and all the time our governemnt has just paid lip service with no leadership.... this crap would never happen under Australias regulatory system .
go...................
Be careful some comments sure to upset mid life crisis man Mike Hoskin by talking bad about high fliers that he bound to admire.
I thought John Keys background in finance would have meant some kind of government intervention in cracking down on white collar crime.
It appears he is too busy smiling on TV instead.
Watch for Winston Peters to ride this for all its worth next year. Many NZer's who lost money will hear him.
You seem to forget that the people who allowed this mess to happen were the mum and dad investors who got greedy and thought that they could send $50K to these chaps and earn 12% return for no risk.
It was the stupid new zealand public that allowed these idiots to create finance companies in the first place.
I wonder who was the dummy who made the decision the do a deal with HANDOVER.With such a stupid decision Allied dont deserve to be in business.
A matter of time............
Alloway and Loughlin should now be on the list of potential crooks in the finance sector alongside Mark Hotchin, Eric Watson, Jock Hobbs, Brian Fitzgerald etc etc etc
You missed out Greg Muir !!!!!!!!!!!!!!!!!!!
And where is Mr Alloway during these troubled times. Why isn't he fronting given that he is the self appointed Saviour of the Allied and Hanover shareholders. Maybe he is busy applying the lip gloss?
Don't forget to include Somers-Edgar and his cohorts on that list...the FirstStep losses are massive.
The investors money in Hanover was lost years ago. Everyone has held on to some hope that it might magically re appear with the Allied structure.
Allied took the hospital pass, did their best to manage and unwind the loan book thus minimising the hit the original Hanover investors would take. Allied will now ultimately have to bear the brunt of negative public sentiment but Allied are not to blame.
Gee, you mean, the corpse still twitches? Please, someone, inject it with formaldehyde, and prepare the service. The mourners are becoming restless, loitering outside the chapel.
The sheep are AL LIED down and ready for the farmers market. Trust in the guardians for they will look me over and put me to sleep.
The NZ finance industry seems to be populated by one saint and thousands of cockroaches.Thecockroaches will survive.Can anyone explain why the Allied shares are still selling at way above NTA
Speirs was a good deal. One lucky shot doesn't mean that there is skill there to try for two. Alloway needs to put his hand up and give an explanation for taking on this hospital pass. Anyone in their right mind would have given Hanover assets a wide berth.
Yeah, and Roger Wallis has come along to mourn, with a wreath, and to pay his respects. But he's grinning like a Cheshire cat.
I think you all miss the point. Allied Farmers (the parent) HAD to do the deal with Hanover as they were 100% dead without it. They may still be dead with it of course, but at least it gave them a chance (if only a small one). The parent must be wondering whether to cut the cord with the finance company though...no shareholder value there anyway, and I can't imagine Westpac are happy for them to transfer Hanover assets into the subsidiary.
Must have had some good reasons to go after Hubbard with the jack-boots and leave the real crooks to take off with the dough eh?
Just announced receivership
And Standard &Poor's revised rating? How about ZZ/Z
AF's purchase of Hanover, makes Dr Cullen look like he chiselled Toll, on his buy-back of NZ Rail.
One down, one to go! I imagine ther are cross default clauses in Allied Farmers Westpac documentation.
When are people such as these going to be called to account?????