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Allied Farmers wears more post-Hanover cost and delay

Monday 25th June 2012

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Allied Farmers has agreed to extend a $13.4 million loan to its failed finance arm for a year, and expects to write off a further $1.8 million on the value of property inherited from the collapsed Hanover Finance group.

The secured loan was due for repayment by Allied National Finance, now in receivership, on June 30, but will now be extended to June 30 next year, Allied Farmers announced to the NZX this afternoon.

Its expected write-down in the carrying value of one of the ex-Hanover property loans owned by Allied Farmers Investments, a subsidiary company, follows a draft indicative estimate "that suggests the return … may be significantly lower than anticipated, partly as a result of weather-related damage to the property."

"The board is awaiting definitive and certain information from the receiver of the property, and once that information is in a definitive and certain form the board will be in a position to determine and confirm the quantum of any write down in the carrying value," the company said.

Allied Farmers shares have traded on thin volumes at an unchanged price of 2.8 cents apiece today.

The Hanover loan book and property assets have been a millstone since Allied bought them in an audacious debt-for-equity swap at the end of 2009, only to write off the majority of the $394 million transaction value and shut down Allied Nationwide Finance.

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