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

 


Taxman comes calling on Allied Farmers for $3.7M

Taxman comes calling on Allied Farmers for $3.7M

By Paul McBeth

Feb. 25 (BusinessDesk) - Penny-dreadful stock Allied Farmers is teetering closer to the abyss after the Inland Revenue Department issued a statutory demand for $3.7 million in outstanding debt and adding another default event to the failed finance company.

The tax department is requiring payment from Allied Farmers Rural within 15 working days of Feb. 14, when the company advised IRD it was in talks with its secured lender Crown Asset Management. The demand is another enforceable event, and comes two weeks after an unnamed secured lender made a call on a $500,000 debt. Allied has until the end of the week to come up with a way to fend off its secured lender's call.

The Hawera-based company said it believes it can come up with a proposal for repayment on terms that will satisfy the tax department, and with support from CAM, "given that the continued trading of AFRL (Allied Farmers Rural) would ultimately result in a superior return for both."

In December 2011, Allied Farmers Rural sold its livestock business, with $280,000 of assets, for shares in a wholly owned subsidiary, New Zealand Farmers Livestock.

It then sold part of that company to a company owned by employees of Allied Farmers Rural, and issued more shares to Allied Farmers Rural's livestock agents, leaving it with 68 percent of the new company.

Those transactions were settled on a cash basis with a valuation of the livestock business at $7.5 million.

Allied's latest annual report shows it hasn't met the lending covenant to pay all taxes in 2011 and 2012.

Auditor PwC gave a 'Disclaimer of Opinion' on the company's 2012 annual report, saying there was insufficient evidence the group will generate enough cash from asset sales, reach agreement with some of its creditors, retain the support of its secured lender, and find new funding.

The IRD demand is the latest in a string of misfortunes for Allied since its disastrous 2009 debt-for-equity swap with Hanover and United Finance.

Shares in Allied sank 40 percent, or 0.8 of a cent, to 1.2 cents, valuing the company at just $1.8 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news