Allied Farmers settles debts

MATT NIPPERT
Last updated 16:19 04/08/2014

Relevant offers

Industries

EPMU vote in favour of merger with Service and Food Workers Union Banks, consultants and law firms dominate state house sale meetings Chorus victorious in Commerce Commission copper pricing decision Google's Victoria Ransom's tips for New Zealand entrepreneurs Fletcher Residential wins $800m Christchurch housing project Insurance confusion may leave jewellery theft victims underpaid Auckland house affordability record low, Massey University expert says Briscoe could become a trans-Tasman retailer if it wins Kathmandu House values rise 9.3 per cent as Auckland effect spills over: QV Floating mortgage rates seen falling with RB cuts ahead: ASB

Allied Farmers has finally secured agreement to disentangle itself from collapsed Allied Nationwide Farmers after striking a $2 million deal with the government-run finance company bad bank.

In a release to the NZX Allied Farmers said it had struck an agreement with Crown Asset Management (CAML) to pay two tranches, each of $1m, to settle debts still owing following the 2010 collapse of Allied Nationwide Finance.

CAML was formed by the government to absorb and work out the considerable rump of toxic assets held by collapsed finance companies, including Allied Nationwide, that were covered by the Crown Retail Deposit Guarantee Scheme.

Under the deal Allied Farmers would immediately pay $1m in cash, with a further $1m to follow by October 3.

The first payment to CAML is being funded by the sale of 10 per cent of shares in NZ Farmers Livestock to other shareholders. The shares are owned by Allied subsidiary Allied Farmers Rural which would continue to own 57 per cent of NZ Farmers Livestock.

The second tranche is proposed to be funded by issuing non-listed three-year bonds in Allied Farmers Rural.

The settlement has also secured the approval of other Allied Farmers Rural bondholders to extend the maturity date of bonds due for repayment next month by 12 months.

Accounts for Allied Farmers show the company owed $2.65m to CAML at December 2013. The accounts note this liability is secured by a general security agreement.

If Allied Farmers fails to make full payment by October 3 CAML would ‘‘continue to reserve its rights’’, the company said. 


Ad Feedback

- Stuff

Special offers

Featured Promotions

Sponsored Content