Allied Farmers to raise up to $1.2M in placements, share purchase plan

Tuesday 28th April 2015

Allied Farmers, which owns a livestock business and has a holding company that is selling down loans and property assets acquired from Hanover and United Finance, plans to raise as much as $1.2 million to repay debt and provide working capital.

The Hawera based company says it will raise $200,000 to $300,000 in a private placement and up to $1 million from existing shareholders in a share purchase plan partly underwritten by Fraters Group, a private company associated with former Citigroup director Mark Benseman. Dependent on the success of those two capital raising efforts, Allied Farmers would then raise up to $500,000 in a second private placement.

The shares will be offered at 5 cents apiece, a 10 percent discount to the volume weighted average in the 20 days through until; April 24 of 5.5 cents. The stock fell 1.8 percent to 5.5 cents today.

The company has had a difficult life since taking over the loan books of failed finance companies Hanover and United, avoiding liquidation in 2013 by selling bonds, and selling down its stake in NZ Farmers Livestock to about 57 percent last year. That helped repay $2 million owed to Crown Asset Management, which was set up in 2012 to acquire the assets of five failed finance companies repaid by the government under its retail deposit guarantee scheme, including Allied Nationwide Finance.

Allied Farmers shares have lost more than 99 percent of the their value in the past five years. The company turned to a profit of $907,000 in its first half, from a year earlier loss, on a better than expected performance from livestock.

BusinessDesk.co.nz

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