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Allied Farmers may lift loan book value by $276K as IRD lurks with liquidator's axe

Tuesday 28th May 2013

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Allied Farmers, which kept itself alive in March through a fire sale of toxic loans, may lift the value of its loan book by $274,000 as the Inland Revenue Department threatens to wind up its rural operation to recover unpaid tax.

The Hawera-based company's board, which is finalising its 2013 accounts, "considers it appropriate to advise that indicatively the net positive impact of the assessment will be approximately $276,000." It made the statement one day after receiving a notice to liquidate its Allied Farmers Rural subsidiary over an unpaid $4.2 million tax bill.

As at Dec. 31, Allied Farmers' asset management unit, which ring-fenced the toxic ex-Hanover loan book, had assets totalling $4.75 million and liabilities of $1.29 million.

The group had net loans and advances worth $1.02 million at the end of the calendar year, with $4.75 million past due and impaired.

The company survived a call on debt from an unnamed creditor earlier this year after it sold various loan assets with no book value for $100,000 upfront and potential for a further $500,000.

Allied Farmers is trying to rebuild itself after its disastrous acquisition of financial assets from Hanover and United Finance for $394 million in 2009.

The shares sank another 10 percent to 1.8 cents today, valuing the company at just $1.63 million.

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