Al­lied threat­ens debt de­fault

South Waikato News - - RURAL DELIVERY -

Listed com­pany Al­lied Farm­ers may de­fault on a $500,000 debt.

Al­lied told the stock ex­change it was due to re­pay the loan from the sale of an as­set next month but had re­ceived a re­quest for im­me­di­ate re­pay­ment.

If an ex­ten­sion was not granted, it said, ‘‘that would re­sult in an en­force­able event of de­fault un­der ALF’s se­cured loan fa­cil­ity’’.

Last week Al­lied be­lat­edly pub­lished its an­nual re­port, re­veal­ing its au­di­tor PWC was un­cer­tain the com­pany qual­i­fied as a go­ing con­cern.

In his re­port, chair­man Garry Bluett noted the com­pany’s loss of $14.1 mil­lion for the year to June was mainly caused by fur­ther write­downs of $9.3m on as­sets ac­quired from failed fi­nance com­pa­nies Hanover and United in De­cem­ber 2009. Hanover and United’s loan and prop­erty as­sets were then said to be worth $396m.

The deal gave the fi­nance com­pany’s deben­ture hold­ers 97 per cent own­er­ship of Al­lied in ex­change for their stock.

How­ever, those as­sets have since been sub­stan­tially writ­ten down. At Fri­day’s clos­ing share price of 2.8c, Al­lied had a mar­ket value of $2.5m. At bal­ance date, Al­lied owed $17m to its for­mer sub­sidiary Al­lied Na­tion­wide Fi­nance, now in re­ceiver­ship.

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