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

 

Allied Farmers sells stores to Fonterra’s RD1

Allied Farmers sells stores to Fonterra’s RD1 to pay down debt

By Paul McBeth

Aug. 3 (BusinessDesk) – Allied Farmers Ltd. will sell its rural merchandising stores to rural supplies chain RD1 Ltd. as it seeks to raise funds and repay outstanding debt from its ill-fated purchase of the Hanover and United Finance loan books in 2009.

RD1 will buy six stores and lease one of Allied Farmers’ 11 retail outlets, adding to the 57 stores it has nationwide. The price wasn’t undisclosed. The deal will be done next week once RD1 completes a Land Information Memoranda review on the stories.

Last month, Allied Farmers rural division said it planned to sell the stores, and chief executive Steve Morrison told BusinessDesk this sale will minimise the impact on staff cuts and “no centre will be losing store coverage.”

“There’s been a lot of focus on the loss of jobs and the loss of stores, and this arrangement minimises that,” Morrison said. “We looked at whether we should inject more capital and decided to do what we’ve done,”

RD1 is buying the physical stores and will offer jobs to many of the 45 Allied Farmers staff affected, it said.

“Where ever possible, we want to try and keep good rural retail staff employed in these communities,” RD1 general manager Nick Berry said in a statement. The stores “provide employment and essential services – without them, those communities would be isolated and agriculture would suffer.”

The funds raised will go into repaying debt as Allied Farmers fights to survive after giving up on its failed bid to become a major lender with the tainted Hanover assets. It says it cut total group debt by more than $50 million in the year ended June 30.

Morrison, a former Fonterra Cooperative Group executive was tapped to head the rural team in June.

“We’re going to focus on our livestock and real estate businesses,” he said.

Last month, Fonterra bought back the half-stake in RD1 it didn’t own after its Australian partner Landmark was bought by Canada’s Agrium for an undisclosed sum. Allied Farmers’ merchandising stores will join the 57 RD1 stores nationwide. PGG Wrightson Ltd. is New Zealand’s biggest rural supplies company.

RD1 said it plans to widen its store network to service Fonterra farmers across the nation.

Allied Farmers shares have plunged to 0.7 cents apiece since it acquired loan assets from Hanover and United Finance in a debt-for-equity swap at the end of 2009. It had hoped transaction would propel the company into the NZX 50 Index. Since then, the loans have lost more than three-quarters of their near $400 million value.

The company paid for the loans by issuing almost 2 billion shares to the Hanover investors.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 




Civil Contractors: Massive Rebound In Civil Construction Business Confidence

New Zealand’s civil construction industry is riding a massive rebound in post-pandemic business confidence – but this may be undermined by skills shortages, which continue to be the industry’s number one challenge... More>>



Energy: Feeling Our Way Towards Hydrogen - Tina Schirr

Right now hydrogen is getting a lot of attention. Many countries are focusing on producing hydrogen for fuel, or procuring it, or planning for its future use... More>>

Maritime Union: Calls For New Zealand Shipping To Resolve Supply Chain Crisis

The Maritime Union says there needs to be innovative responses to ongoing shipping congestion. Maritime Union of New Zealand National Secretary Craig Harrison says it is essential that New Zealand develops its own shipping capacity... More>>


Housing: New Home Consents Continue To Break Records

A record 44,299 new homes were consented in the year ended June 2021, Stats NZ said today. “The annual number of new homes consented rose again in the June 2021 year, the fourth consecutive month of rises,” construction statistics manager Michael Heslop said... More>>


Real Estate: June Home Transfers Remain High
There were 44,517 home transfers in the June 2021 quarter, the highest June quarter figure since 2016, Stats NZ said today. The number of home transfers was very similar to the March 2021 quarter and was up 18,252 from the June 2020 quarter... More>>



Statistics: Household Saving Falls In The March 2021 Quarter

Saving by New Zealanders in the March 2021 quarter fell to its lowest level in two years after rising sharply in 2020, Stats NZ said today. Increases in household spending outpaced income growth, leading to a decline in household saving from the elevated levels that prevailed throughout 2020... More>>

ALSO: