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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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