Friday 3rd September 2010
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Allied Farmers chief executive Rob Alloway has resigned, following chairman John Loughlin out of a firm whose finance arm is in receivership, and whose bloated share registry reflects its exposure to failed finance company assets.
Alloway will step down in December, while remaining on the board in the meantime, the company said in a statement.
Under Loughlin and Alloway, the company purchased 'investment assets' from finance companies Hanover and United. Those assets were worth some $400 million and are now valued at $94.3 million.
Allied paid for the loan books by issuing some 1.9 billion of new shares at about 20 cents apiece, flooding a share register that previously had 37.7 million.
The stock traded at 2.5 cents today.
"The time was right to step down from the hands-on, day-to-day role of running the business as the restructuring process which began about a year ago was nearing completion," Alloway said.
"With the restructuring process now coming to an end and several asset realisations likely in the short term, the company will be in a different position in December when I step down," he said.
"My key goal was to establish a more stable financial platform and normalise the company's banking and other commercial arrangements."
The 13,800 Hanover and 2,600 United investors were hoping for full repayment when they approved a moratorium in 2008. They own about 98% of Allied Farmers.
Alloway said further asset sales will leave the company with "substantially reduced senior debt."
"We've had to make some very tough decisions along the way but we are now close to reaching the stable ground we need to rebuild what I still believe will be a very sound and respected rural services business," Alloway said.
The company is now looking for a new chief executive.
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