Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Crown Asset keeps Allied Farmers alive with funding deal

Crown Asset Management keeps Allied Farmers on life support with funding deal

By Paul McBeth

Dec. 21 (BusinessDesk) - Crown Asset Management, the entity set up to handle assets from failed finance companies backed by the government's deposit guarantee, will take up what's left of the decimated Hanover and United Finance property assets from Allied Farmers.

The deal sees CAM take the assets on to its accounts at their $13.5 million book value and pay out $385,433 owed to a trading back which had a claim on sections at Jacks Point in Queenstown, according to a statement to the NZX.

The transaction will satisfy $13.1 million of the $18.7 million owed to the Crown agency, and any proceeds raised from the sale of the Jacks Point land will go towards paying down the rest of the debt.

Allied Farmers is selling off most of its assets to repay debt, and CAM has indicated it may offer more significant funding support when those are sold, the Hawera-based company said.

NZX Market Supervision granted Allied Farmers a waiver from having to seek shareholder approval as the size of the transaction exceeded more than half the penny-dreadful stock’s market capitalisation.

"If the funding facility was not provided the directors would need to seriously consider whether ALF could continue to trade, in which case significant value would be lost for shareholders, creditors and other stakeholders," Allied Farmers said in its submission to the regulator.

The property assets came as part of its disastrous acquisition of the assets of the failed Hanover and United finance companies. The Hanover and United deal was valued at $394 million when the assets were acquired in a debt-for-equity swap at the end of 2009.

In the latest accounts, the assets of Allied Farmers’ Asset Management Services unit, where the former finance company assets are held, were valued at $22.4 million, down from about $37 million a year earlier.

Allied Farmers said it had unsuccessfully tried to sell the Jacks Point sections, with buyers demanding a significant discount. The deal will let the blocks be sold in a gradual way over the next two-to-three years.

CAM ended up with the debt because of a related party loan between Allied Farmers and its failed finance unit. The Crown agency doesn't hold security over Allied Farmers' NZ Farmers Livestock joint venture, whose assets have been ring-fenced.

The shares rose four-tenths of a cent to 2.9 cents in trading today, valuing Allied Farmers at $2.3 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news