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

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news