Tuesday 31st May 2011 3 Comments
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Allied Farmers won't be replacing chief executive Rob Alloway when his contract expires on June 30, says chairman Garry Bluett.
In a notice to the NZX, Bluett said Allied Farmers is being split in two, one being investments, the division managing the property and loan assets acquired from Hanover Finance and sister company United, valued at $396 million when Allied acquired them at the end of 2009, and the other being the company's rural servicing operations.
The first division won't have a full-time chief executive and the company says it is well advanced in searching for a chief executive to head its rural division and expects to make a further announcement “shortly.”
Of the investments division, Bluett says: “The progress made by the executive team over the last 18 months in dealing with these assets is such that the board believes a full time chief executive is no longer required for this division.
“The company is in the process of appointing a third party to manage the assets on its behalf.”
This arrangement will likely include using lawyer Graham McKenzie as a consultant “on an as required basis.”
McKenzie, a former senior partner with Bell Bully and who served as a member of the 32nd America's Cup International Jury based in Valencia, Spain, is an insolvency specialist.
Bluett told DepositRates (GoodReturns?) McKenzie is the third party referred to in the announcement although the contract is still to be signed.
“We're only down to about a dozen assets now. It doesn't need a full-time person,” Bluett says. The company does have a team in place managing the process but it “perhaps needs more or a legal mine than perhaps we've had in the past.”
Allied is currently operating at the mercy of the receivers of its former finance company, Allied Nationwide Finance (ANF), having defaulted twice already on loans it owns the finance company and likely to do so a third time on July 1, the day after Alloway's contract ends.
Asked what's likely to happen on July 1, Bluett says: “We're still in discussions” with ANF's receivers.
To the suggestion the reason Allied Farmers wasn't replacing Alloway was because it might be going into receivership, Bluett says: “We obviously don't think that. If we were going into receivership, why would we appoint someone?”
If all goes well, the company may be able to announce the new chief executive of the rural services operations within a week, Bluett says.
The value of the Hanover assets had been written down to just below $110 million at December 31.
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