Allied Nationwide crumbles into receivers arms

Friday 20th August 2010

Allied Nationwide Finance has been put in receivership after being forced to halt new fund raising, becoming the seventh firm poised to make a call on the government retail deposit guarantee.

The unit of Allied Farmers has asked trustee NZ Guardian Trust to appoint receivers after running out of time to remedy a breach in its Trust Deed ratio. It had until 5 p.m. today to save itself. It has about $130 million owed to about 4,500 depositors.

“The Crown stands fully behind its guarantee commitments and we expect an orderly process of payment to eligible Allied Nationwide Finance depositors,” said Treasury deputy secretary, financial operations Philip Combes, in a statement. It may take 2-3 months to verify who is owed what, he said.

Guardian Trust has appointed Kerryn Downey and Andrew Grenfell of McGrathNicol as receivers. The advisory firm has been working for Guardian Trust and wrote the report that resulted in the trustee alleging the breach, Allied Nationwide said in its statement.

Allied Nationwide said it expects “an acceptable outcome” from the receivership because of the current net asset position and shareholder funds. It had tried to find ways to placate Guardian Trust but had been unsuccessful.

Shares of the parent company, Allied Farmers, were last down 3.7% to 2.6 cents 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.

The parent’s chairman John Loughlin and chief executive Rod Alloway didn’t immediately return calls.

Speirs Group separately today said its Speirs Investments unit holds 2 million perpetual bonds issued by Allied Nationwide and has a put option through until Sept. 30 2013 at $1 a bon plus interest.Speirs is weighing an impairment of the holding.

Businesswire.co.nz

Comments from our readers

No comments yet