Allied Farmers managing director Rob Alloway has resigned, eight months after the group took on the stricken Hanover finance loan book.Mr Alloway will step down from his current role in December but will stay on the board in the meantime, the company said
Allied Farmers managing director Rob Alloway has resigned, eight months after the group took on the stricken Hanover finance loan book.
Mr Alloway will step down from his current role in December but will stay on the board in the meantime, the company said in a statement.
His resignation comes hard on the heels of the departure of chairman John Louchlin, who quit the board when subsidiary company Allied Nationwide Finance was placed in receivership on August 23.
Mr Alloway remains a significant shareholder through his private company Allied Capital.
He and Mr Louchlin drove the purchase of Hanover’s assets in a debt for equity swap last December.
Those assets – deemed to be worth $396 million when the deal went through – are now valued at $94.3 million.
Mr Alloway said: “With the restructuring process now coming to an end, and several asset realisations likely in the short term, the company will be in a different position in December when I step down.”
Allied Farmers this week gained a two-week extension on filing its annual results after the firm's finance arm was put in receivership.
The group is also renegotiating the terms of its bank facility with Westpac following the receivership.
Allied Farmers' senior debt to Westpac totals $16.9 million, consisting of a multi-option credit facility of $14.4 million and an overdraft of $2.5 million.
However, as some of the Hanover assets contained further debt to other trading banks and second tier financiers, total group debt as at December 31 blew out to $79 million.
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.
Mr Alloway said his key goal at Allied had been to establish a more stable financial platform and “normalise” the company’s banking and other commercial arrangements.
“We are expecting this process will be completed in the next few weeks leaving the business with substantially reduced senior debt and feel it is right to now give the board time to identify a new CEO to take the company forward after a challenging period,” he said.
“We’ve had to make some very tough decisions along the way but we are now close to reaching the stable ground we need to rebuild what I still believe will be a very sound and respected rural services business.”
