Wednesday 3rd August 2011
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Allied Farmers is selling its rural merchandising stores to rural services company RD1 for an undisclosed sum.
The agreement depended on RD1 reviewing land information memoranda for the stores, which was expected to be a formality and the parties were confident the agreement would become unconditional on completion of the review, Allied Farmers said today.
It had announced it was getting out of the rural stores a month ago, either by selling or closing them.
That decision was made after reviewing the recent and forecast poor performance of rural merchandising, in a highly competitive environment.
Moving out of merchandise activities would lift overall profitability, and enable the group to accelerate debt retirement.
Most of the stores being sold would continue to operate, Allied Farmers rural chief executive Steve Morrison said today.
Settlement of the sale was expected early next week, and transferred stores would start operation as part of RD1 or be absorbed into existing RD1 operations shortly after that.
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