Taxman loosens grip on Bridgecorp cash

NZPA

Wednesday 27th July 2011 1 Comment

Investors won't know for a while the actual benefit from a $2.45 million windfall paid to Allied Farmers Investments as final settlement of a loan made by Hanover Finance company to Bridgecorp.

The money had been withheld because the Inland Revenue Department had claimed it to cover debts owed by failed financier Bridgecorp, which was placed in receivership.

In May, a judge ruled in favour of the Bridgecorp receivers, and the IRD relinquished its claim on the cash.

Allied Farmers had kept the loan on its books at nil value, and is now seeking updated valuations on Allied Farmers Investment's loan assets. Allied Farmers Investments was the holding company for the loans, investments and property assets Allied Farmers acquired from Hanover Finance and United Finance in December 2009.

At the time of the deal the Hanover and United assets had an attributed acquisition value of $396.2m, but last August Allied Finance said the fair value assessment of the net assets had been determined at $94.3m.

Today directors said the unexpected Bridgecorp proceeds were pleasing.

"Until the assessment of the value of all assets is completed, the board is unable to form a view on the overall impact the receipt of these proceeds will have on the year end financial result," directors said in a statement.

All the windfall would be used to reduce Allied Farmer's own debt to its secured lender, Allied Nationwide Finance -- also in receivership.

Comments from our readers

On 28 July 2011 at 9:43 am Ivan said:

Investors won't see a cent of it. Greedy directors will have other plans for that money.