Friday 27th April 2012
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Allied Farmers, the company that took over Hanover Finance’s loan obligations, said it has increased a provision for any shortfall in a $7 million loan guarantee sold by its asset management services unit.
The company has increased the provision by $569,000 to about $1.4 million, based on the original amount given in the notes to its 2011 accounts of $832,000.
The provision was increased even though the purchaser of the overdue loan had received “a substantial repayment” of the amount outstanding. The purchaser's name hasn't been disclosed.
“The loan has been outstanding for many years and has been the subject of complex litigation,” Allied said. “At this point in time it is unclear how much of the remaining unpaid amount of the loan will be repaid, or the amount that will be payable under the guarantee,” it said in a statement today.
Shares of Allied last traded at 4 cents, valuing the company at $3.6 million.
The loans taken on from Hanover and United Finance were valued at $394 million when they were acquired in a disastrous debt for equity swap.
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