Allied Farmers secures up to $7m private equity backing

Allied Farmers says it has secured up to $7 million of new equity funding from a "large professional investor".

Chairman John Loughlin said the capital raising would allow the company to consolidate and restructure the business, which operates in the finance and rural sectors.

The investment might take a form that in part needed shareholder approval or offered shareholders the right to take part and might involve a shareholder purchase plan.

Allied Farmers said it intended to make further announcements, including clarification of the structure of the capital raising, by October 30.

Loughlin said the past four months had been tough but spring had brought optimism. "Recent announcements on the increased dairy payout have seen farmer confidence lift and early wider signs of growing confidence in the regions."

Previously, Allied Farmers reported a bottom line loss of $33.3 million in the year to June 30 after a $20.5 million writedown on the value of Allied Nationwide Finance. The loss compared with a $2.37 million profit in the same period last year. Shares closed up 2c at 30c yesterday, having fallen from $1.10 last October.

- NZPA