Allied Farmers Announce $7.5 m Rights Issue

Allied Farmers Announce $7.5 m Rights Issue

Allied Farmers Limited, the publicly listed rural services and finance group, today announced that it intends to seek up to $7.5 million from a renounceable Rights Issue to the Company’s existing shareholders. A Prospectus and Investment Statement will be mailed to shareholders by 2 7 April 2009.

Under the Offer, shareholders will be entitled to six New Shares for every seven Shares they own on the record date, 2 2 April 2009. The New Shares issued will have a stapled Option, one Option for every New Share issued. The rights are renounceable and application to list the rights will be made to NZX.

Under the Offer, which will open on 23 April the price of each New Share together with the stapled Option is $0.40, with no additional consideration payable for the Options. The Options will be able to be exercised until 14 May 2010with an exercise price of 60 cents per share. The Offer will close on 15 May 2009.

The Offer is partially underwritten to $6 million by McDouall Stuart Securities Group Limited and McDouall Stuart Securities Limited will act as the organising NZX participant for the Offer.

The proceeds of the Offer will be used to re-finance the arrangements relating to the acquisition of Speirs Finance Limited in late September last year, to reduce core debt and provide additional working capital for the Company’s rural sector business divisions, and to meet the costs of the Offer.

The Company currently has 21,896,221 shares on issue. This Offer has a maximum number of 18,768,189 New Shares and the same number of Options and if fully subscribed the Offer will see the Company have up to 40,664,410 issued shares (not including shares issued on the exercise of the Options).

No money is currently being sought and no applications for securities will be accepted or money received unless the subscriber has received a Prospectus and Investment Statement.

John Loughlin, Allied Farmers Chairman said, “Allied Farmers has a proud history of supporting farmers for over 90 years providing livestock trading, rural merchandise, finance and real estate services. We now are seeking additional capital to underwrite the Company’s growth and development, and to provide a further opportunity to our shareholders to invest in the future of Allied Farmers.”

The Company’s shares last traded at 65 cents per share.

ENDS

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