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Allied Farmers remaining ex-Hanover properties drop in value by 17%

Friday 7th May 2010

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Allied Farmers, the finance and rural services company that transformed its share capital by offering to swap shares for the assets of Hanover Finance and United Finance investors, has cut the value of the remaining properties it acquired.

Allied lowered the fair value of remaining properties to $87.5 million from $105.4 million after soliciting independent valuations. The re-assessment is required for its 2010 financial statements.

The loan assets acquired from Hanover are “likely to be subject to an increase in impairment provisions,” said managing director Rob Alloway. The property revaluations “are a mixture of higher and lower valuations, and reflect the inherent uncertainty of the current market for property assets of this nature.”

The company wrote down the value of the entire portfolio of Hanover loans and properties by $220 million to $175.5 million in the first half as it began the process of discovering the true value of loans in default, on half-finished property developments.

Since then, Allied Farmers has netted some $3.4 million by selling properties at the Jack’s Point development near Queenstown and an industrial development in Wauchope, New South Wales. Some of the proceeds were used to repay debt.

Shares of Allied last traded unchanged at 7 cents. The issue of shares to Hanover and United investors pushed up the number of shares on issue to 1.95 billion from just 37.7 million before the deal.

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