Allied Farmers names Resimac as new investor

Australia's Resimac Ltd has been named as the new investor in Allied Farmers Ltd.

Allied Farmers is holding its annual meeting today in Hawera after last week unveiling a plan to acquire the assets of Hanover Finance and United Finance.

At the end of September Allied Farmers said it had secured $7 million of equity from an unnamed outside investor. It did not say what form the equity would take.

Today it said convertible notes, perpetual bonds and warrants would be issued by Allied Farmers and Allied Nationwide Finance Ltd to Resimac.

There is also a strategic alliance agreement with Resimac. Resimac chief executive Warren McLeland will be invited to join the Allied Nationwide Finance board, with further Resimac board appointments and management collaboration arrangements likely later.

Resimac is a pioneer of the Australian mortgage backed securities market and has continued to sell securities backed by mortgages during the turbulent times in financial markets.

It sold $A290m ($NZ370m) of securities backed by residential mortgages in October.

Allied Farmers chairman John Loughlin said Resimac would assist with the objective of significantly expanding the finance business and would be valuable in the bid to acquire and subsequently manage the assets of Hanover Finance and United Finance.

The goal was to develop Allied Nationwide Finance as one of the leading non-bank lenders in New Zealand.

The annual meeting was told that the first few months of this financial year reflected farmers operating in survival mode but there had been a lift in the merchandise, livestock and real estate business this month coinciding with a lift in the forecast payout in the dairy industry.

Allied Farmers will be forced to writedown its investment in Allied Nationwide Finance by $19.5m due to accounting rules.

Allied Nationwide Finance has tracked broadly to budget in the first four months of this financial year, the meeting was told.

"There have been no big negative surprises," John Mallon, chief executive of Allied Nationwide Finance, said.

NZPA