Allied Farmers tries to cobble together loan repayment

Allied Farmers tries to cobble together loan repayment as liquidation hovers

March 4 (BusinessDesk) - Allied Farmers, which reported a further $4.1 million writedown on its ex-Hanover Finance assets last week, is trying to cobble together a loan repayment by the end of the day in a bid to stave off a potential liquidation.

The Hawera-based company is in talks with various parties, including secured lender Crown Asset Management on a repayment proposal to a different creditor, who called on a loan to be paid by the end of today. Allied owes $540,000 including interest, secured over a $3.75 million loan asset that it hasn't been able to realise.

"The creditor has said that in the absence of an acceptable arrangement, it may shortly move to the next step," the company said. "The next step would be applying for orders appointing liquidators to ALF (Allied Farmers) and AFIL (Allied Farmers Investments)."

The call on the loan was made last month, and was followed by the Inland Revenue Department making a statutory demand for $3.7 million in unpaid taxes.

Allied is trying to rebuild itself after its disastrous acquisition of financial assets from Hanover and United Finance for $394 million in 2009. It has ring-fenced what’s left of the assets in its Allied Farmers Investments unit, which had assets of $25.7 million, according to its first-half accounts.

The shares were unchanged at 1.9 cents today, valuing the company at just $1.7 million.

(BusinessDesk)

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