Allied Farmers is having to renegotiate the terms of its bank facility with Westpac following the receivership of its subsidiary Allied Nationwide Finance.Allied Farmers, which took over the stricken Hanover finance loan book last December, was granted an
Allied Farmers is having to renegotiate the terms of its bank facility with Westpac following the receivership of its subsidiary Allied Nationwide Finance.
Allied Farmers, which took over the stricken Hanover finance loan book last December, was granted an extension on the Westpac facilities until March next year.
However, the receivership of Allied Nationwide has meant that the milestones for the agreed debt terms, including debt retirement and a restructuring initiative, will require renegotiation, the company said in a statement.
Allied Farmers said it currently has senior debt totalling $16.9 million, consisting of a multi-option credit facility of $14.4 million and an overdraft of $2.5 million.
This debt has been reduced from a total of $19 million as at June 2010.
Before June 30 Allied had been paying quarterly principal repayments to Westpac of $500,000.
The debt facilitiy is secured by a general security agreement over the assets of Allied Farmers' charging group.
The charging group includes the parent company, Allied Farmers, its wholly owned subsidiaries holding the assets of Allied Farmers' rural business and the assets acquired from Hanover Finance and United Finance.
"Allied Farmers is in constructive discussions with Westpac and the lead manager of its previously announced rights issue," the company said.
Allied temporarily withdrew a planned $19.3 million capital raising via a rights issue when the finance arm breached its trust deed ratios earlier this month, before going into receivership.
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