Monday 23rd August 2010 3 Comments
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John Loughlin has resigned as chairman of Allied Farmers after its finance unit was placed in receivership.
A statement from the company said Loughlin’s resignation was accepted “with regret” and he had worked “extremely hard throughout what has been a very difficult period for the company”.
Allied Nationwide Finance was put in the hands of Andrew Grenfell and Kerryn Downey of McGrathNicol after a breach of its trust deed. The breach, which Allied disputes, forced the company to withdraw its debenture prospectus and the receivership is “a direct result” of that move, Allied Farmers managing director Rob Alloway said in the statement.
Loughlin had been on the board of Allied farmers since 2004 and also chaired Allied Nationwide. A replacement would be announced shortly.
Alloway said the lack of ability to raise funds via its prospectus meant the parent company had been asked to provide finance support “on a scale that it could not justify in the interests of its shareholders”.
The finance unit has about $130 million owed to about 4,500 depositors, most of which is covered by the government retail deposit guarantee.
Shares of Allied Farmers fell 3.7% to 2.6 cents on Friday and have shed more than 70% of their value this year. More than 95% of the stock is held by former investors in Hanover and United, who accepted the shares in exchange for their financial assets. Those loans are now worth less than a quarter of the price paid.
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