Allied Farmers says the assets it acquired from the Hanover group of finance companies are now worth $94.3 million, less than a quarter of what they were deemed worth when shareholders voted for the takeover last December.
In a market update this morning
Allied Farmers says the assets it acquired from the Hanover group of finance companies are now worth $94.3 million, less than a quarter of what they were deemed worth when shareholders voted for the takeover last December.
In a market update this morning Allied said the new valuations were subject to any adjustments that may arise from the completion of Allied Farmers’ June 30, 2010 year-end audit.
The adjustments represent a shortfall of $301.7 million on the initial value of $396 million and down $81.2 million disclosed in the interim financial statements for the December 2009 period.
Unaudited additional impairment provisions and fair value adjustments of $24.5 million for property assets and $57.8 million for loan assets will be reflected in the June 30 financial statements, Allied said.
Allied shares fell 7.9% to 3.5c by 11am this morning.
New Hanover investors were allocated a total of nearly 2 billion shares last December at an average of 20.69c each share.
Meanwhile, Standard & Poor's has cut its long-term credit rating on Allied Nationwide Finance to CC from B, due to the finance company’s weakening liquidity and cash position.
The downgrade follows news last week last that Allied Nationwide had received notice from Guardian Trust that it was in breach of one of the financial ratios and had 14 days to remedy the situation.
This forced parent company Allied Farmers to postponed plans to raise $19.3 million through a share placement and rights issue.
Allied Nationwide Finance has total deposits of $217 million and needs to replace a $86.2 million loan facility from the BNZ.
The finance company is covered by the Crown retail deposit scheme which ends on October 12 but does not qualify for the extended scheme.
