Bank grants Allied Farmers six month breathing space
Westpac has extended for another six months a $19 million loan facility to troubled finance and rural services firm Allied Farmers.
The move follows Allied’s announcement last week that it had negotiated the sale of a 23.3ha property forming part of the Five Mile development near Queenstown.
Allied had already gained an extension of the debt facility with Westpac to September 24 this year, from an initial expiry date of June 30.
The latest extension runs until the end of March next year.
“The earlier extension was granted to enable both Allied Farmers and Westpac time to consider a number of debt retirement and restructuring initiatives that would have a positive impact for our company,” managing director Rob Alloway said.
While these initiatives remained incomplete, Westpac was still able to amend the facility term, he said.
“We are pleased that Westpac has signaled its confidence in the yet to be completed initiatives by providing the extension of the facility term.”
The Westpac debt consists of a term loan of $16.5 million, down from $21 million a year ago, and an overdraft facility of $2.5 million.
The facilities are secured by a general security agreement over the assets of an Allied Farmers' charging group.
The charging group includes the parent company, Allied Farmers Ltd, its wholly owned subsidiaries holding the assets of Allied Farmers' rural business, and the assets acquired from Hanover Finance and United Finance.
It does not include the assets of Allied Nationwide Finance Ltd, a finance company.