Allied warns of $1.8m loan writedown
Allied Farmers, the rural services firm which failed to transform itself into a major lender, says it will probably have to write down the carrying value of an ex-Hanover property loan by $1.8 million.
The loan was secured over a property that's been in receivership for some time, and a draft estimate suggests the value may have dropped ''significantly lower than anticipated'' partly as a result of weather related damage, the company said in a statement to the NZX today.
The firm's wholly owned subsidiary, Allied Farmers Investments Limited, is the second ranking security holder on the loan. Allied said the $1.8m level is subject to change as it is still in discussions with the receiver.
The news comes as a blow to Allied's attempts to sell off the toxic assets it bought from Hanover several years ago in a bid to transform itself into a finance company.
Earlier this month the firm and Bank of Scotland International said they stood to make a $121m loss on the sale of the Gulf Harbour development north of Auckland.
Separately, Allied said it had negotiated an extension of a $13.4m secured term loan facility held by Allied Nationwide Finance Limited, the firm's finance arm which is currently in receivership.
The loan is now payable on June 30, 2013, 12 months later that initially indicated. As of the end of December Allied had a cash in bank balance of $1.01m.
Allied shares were unchanged at 2.8 cents apiece today, and have shed 97 per cent of their value over the past 12 months.