Allied Nationwide Finance (ANF), which collapsed on Friday, owing $130 million to investors, expects an "acceptable outcome" from its receivership.Allied Farmers said it had decided to stop supporting its subsidiary, which is covered by the Crow
Allied Nationwide Finance (ANF), which collapsed on Friday, owing $130 million to investors, expects an "acceptable outcome" from its receivership.
Allied Farmers said it had decided to stop supporting its subsidiary, which is covered by the Crown retail scheme, saying it was unable to sustain the funding demanded by its trustee following a disputed breach of its trust deed.
In addition to the company collapse, Allied Farmers said its chairman John Loughlin had resigned.
ANF called in the receivers after missing payments on debenture maturities on Thursday, affecting 4500 depositors with $130 million invested.
ANF expects an "acceptable outcome" from the receivership on the basis of its current net asset position and level of shareholder funds.
Receivers Kerryn Downey and Andrew Grenfell of McGrathNicol said they would work closely with ANF management over the next few days, and update investors on their website as information becomes available.
They would also work with the Treasury and the Reserve Bank to determine valid investor claims under the crown scheme as quickly as possible.
McGrathNicol had been acting as independent advisers to New Zealand Guardian Trust (NZGT) and prepared the report on ANF which resulted in the alleged breach of its trust deed ratio earlier this month.
ANF's board then withdrew the company's prospectus.
"This alleged breach, which the Allied Nationwide Finance board and management continue to dispute, had a significant impact on the company's ability to manage liquidity and capital over the coming months," Allied Farmers managing director Rob Alloway said last night.
"Allied Nationwide Finance continued to require funding from Allied Farmers on a scale that it could not justify in the interests of its shareholders."
ANF's receivership was the result of withdrawing the debenture prospectus, as the board was required to do, and not a result of the alleged breach, Mr Alloway said.
ANF said that until Thursday, it had met all its financial obligations, including repayment of maturing debentures.
However, third party commitments and trustee approvals for funding initiatives were not received in time to pay debenture maturities due on Thursday.
Credit rating agency Standard&Poor's has lowered its rating on ANF to D from CC, or to default from highly vulnerable.
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