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Allied Prime Finance Launches Its First Prospectus

October 2, 2006

Allied Prime Finance Launches Its First Prospectus

- Accent on openness, transparency says Chairman John Loughlin

Allied Prime Finance Limited today launched its first Investment Statement and Prospectus for First Ranking Secured Deposits.

Allied Prime Finance is a fully owned subsidiary of the NZ- listed company, Allied Farmers Limited, and was formed from the merger of Allied Farmers Finance Ltd and Prime Finance Ltd.

The Chairman of Allied Prime Finance, John Loughlin, says the release of the Investment Statement and Prospectus marked the debut of a stronger, expanded finance company which proudly retains its roots in rural New Zealand.

“We have started as we mean to go on with a Prospectus which includes detailed, open and transparent information for investors, and a Trust Deed which conforms to industry best practice.

“This merger has created an expanded business more able to compete in the finance sector than either of the parties previously. With an expanded nationwide network, Allied Prime has plans to expand its funding and lending services.”

John Loughlin says that the Directors undertook an extensive and thorough
due diligence process in acquiring Prime Finance. This has turned out to be a real positive both for the parent company and the enlarged business because it now operates in the changed environment for finance companies.

“While some may see the current climate as a difficult one to launch a new Prospectus and a new business, we welcome the sharper interest that will undoubtedly be shown by investors and their advisors.

“The new company is larger, more profitable, and has a better spread of assets. It foreshadows the greater level of consolidation we expect to see across the finance industry in the next 12 to 18 months as a number of companies feel the pressure of lower deposits.

“Allied Prime has been the result of a strategic merger. Some others may be more akin to a forced marriage.”

Focussing on growth

John Loughlin said the merged company would give Allied Farmers’ finance subsidiary the scale necessary to be fully competitive in its sector.

“Our finance business has been a strong performer for Allied Farmers, and we are confident it will continue to deliver strong results.

“The company has a strong Board, with each of the Directors having experience of the governance requirements and disciplines of an NZX-listed company.

“The Board has a long term strategy for Allied Prime, and the natural synergies which the parent has with rural lending will result in growth opportunities for the new company.

“There are plans to expand Allied Prime’s lending sectors, particularly in areas like mortgages and business credit. However, the overall approach will be conservative with the objective that no lending sector will account for more than 25% of the business. This will mean reducing vehicles which are currently 33%.”

Industry outlook

Allied Prime Finance welcomes the increase in regulatory compliance proposed for the sector and encourages the implementation of an appropriate system of credit ratings easily understood by investors.

John Loughlin says Allied Prime expects the current industry pressure on liquidity and funding, which has followed the recent receiverships, to self-correct and return to normal levels during the coming 12 months to 24 months.

“The role of sector in the wider finance landscape is unchanged both for investors and borrowers. Progressively there will be an improvement in the overall quality of the companies meeting these needs.

“In the past two years the finance sector has had asset growth of 52% and profit growth of 62% (NPAT). We are confident growth will continue, albeit at a lower rate.”

New look for expanded Company

The expanded company brings a new look and logo to the sector.

John Loughlin says one the tasks for the new company will be to forge a new identity which will be more visible and marketable than its forebears.

“What will not change are the heartland values that have underpinned the operation and growth of Allied Farmers’ finance business over so many years.”

He said the new identity has been developed to coincide with the launch of the new Investment Statement and Prospectus, based on the heritage and unique features of both businesses.

Allied Prime Finance wishes to be seen as New Zealand’s No 1 heartland finance company. This will be achieved when it is seen by investors, customers and staff as ‘The voice of common sense’.

The company will be marketed under the positioning statement: Allied Prime Finance: Know where you stand.

John Loughlin said that a totara tree symbol has been chosen to represent the company visually, because of its mana, strength and dependability.

“This tree has been used by both Maori and European in construction and carving, and, as fence posts, the totara has become a symbol of rural heritage.“


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