Allied Farmers capital notes (ALF010) mature on 15 November 2011 and noteholders will receive shares in ALF as repayment of their principal, not the cash they would have hoped for.
For noteholders, this is the least preferred option, as cash back at maturity would have been preferred. This is the risk that any capital noteholder takes, however receiving shares in a company that is in better financial shape than ALF is not such a bad thing.
ALF itself is not in good financial shape and has reported a tough few years reporting a $41 million loss in the year ending 30 June 2011, a $78 million loss in the year to 30 June 2010 and a $35 million loss in the year ending 30 June 2009.
The losses are mounting up and are unsustainable unless new capital is raised, and ALF’s balance sheet is vulnerable. To make things a little more confusing for noteholders, ALF will undertake a share consolidation this week to reduce the number of shares it has, and its shares are on a trading halt as they will shortly be consolidated on a 100 for 1 basis.
For sharemarket and fixed income trading enquires contact: Dan Stratful at Investment Research Group (IRG) Authorised Financial Adviser (AFA) 0800 437 8489, 09 304 0232, firstname.lastname@example.org **A disclosure statement is available, on request and free of charge.
Disclaimer In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).
DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
Employees may have an interest in the securities discussed in this report.