Allied threatens debt default
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.