Allied Farmers lifts impairment charge on Hanover loans

Friday 28th May 2010

Allied Farmers, the Taranaki-based finance company that bought Hanover Finance's loan books in a debt-for-equity swap last year, has lifted its expected impairment charge to $51.5 million, and still has a third of the book to revalue.

Managing director Rod Alloway said in a statement the provisions reflect the “challenges in realising the assets acquired”, with tighter funding for property development; longer realisation periods due to re-zoning processes and delays; falling values for Auckland apartments; and the bankruptcy and/or liquidation of borrowers in forced sales.

The impairment puts the fair value at approximately $124 million for the net assets acquired from Hanover, down from $175.5 million in the December 31 financial statements.

Since writing down the loan books’ value at the end of last year, Allied has netted some $3.4 million by selling properties at the Jack’s Point development near Queenstown, and an industrial development in New South Wales.

The shares sank 7.8% to 5.9 cents in trading today, and have tumbled 44% this year.

Businesswire.co.nz

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