Friday 12th November 2010 2 Comments |
Text too small? |
Allied Farmers, which took on the Hanover and United loan books in a failed bid to become a major lender, faces losing another $7 million after HSBC pulled the credit line on one of the firm's subsidiaries.
The Hong Kong-based lender called its $19 million loan facility to Matarangi Beach Estates after Allied refused to put up the same guarantee as the previous owners, Eric Watson and Mark Hotchin, who had poured the vehicle into Hanover to try to keep it afloat.
HSBC will probably try to sell the asset, which was valued at $26 million when Watson and Hotchin poured it into Hanover, and Allied's statement said the firm isn't sure how much it will have to write down.
"We haven't achieved the property sales we have needed with this asset and a recent campaign to sell the entire development was not successful," managing director Rob Alloway said in a statement. "Among the issues we have faced with it is that HSBC's consent to the change of ownership of Matarangi Beach Estates was still outstanding because it was seeking replacement shareholder guarantees while we were not prepared to put the group's wider assets at risk."
Allied struggled to clear $17 million of debt from Westpac through much of this year, and only managed to repay the bank in September after it sold land in Queenstown.
The firm wrote down the value of the Hanover loan book by more than three-quarters from the $396 million initially estimated in the ambitious debt-for-equity swap last year.
It booked a loss of $77.6 million in the year ended June 30 after taking a $40 million hit on the failure of its finance unit.
The shares were unchanged at 2.3 cents.
Businesswire.co.nz
SPG - Change to Executive Team
BGI - Forgiveness of $200,000 of secured indebtedness
General Capital Subsidiary General Finance Market Update
AFT,Massey Ventures,Gilles McIndoe to develop scar treatmen
April 24th Morning Report
Cheers to many fewer grape harvest spills
GTK - Half-Year Results Announcement Date
Government ends war on farming
Sky and BBC Studios renew expanded, multi-year agreement
AOF - Q1 Improved Trading Performance & FY24 Guidance Maintained