Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

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

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.