Allied Farmers reduces debt with Westpac

Photo / Dean Purcell

Allied Farmers Ltd says it has reduced its term debt with Westpac to $1.65 million.

Last week proceeds from the early settlement of the sale of the Five Mile development in Queenstown were used to reduce the term debt position with Westpac from $14.2m to $5.4m.

Last night a second distribution from the Maison Reeves Condominiums receivership in the United States was used to further reduce the debt.

Allied Farmers managing director Rob Alloway said a further figure of around $7m from final sales of the remaining condominiums in the Maison Reeves luxury development in Beverly Hills was expected before the end of the year.

On Friday, the rural services firm reported a full-year loss of $77.5 million after writing off the goodwill of its failed Allied Nationwide Finance business and writing down the value of assets purchased last year from Hanover Finance. The result was unaudited.

On July 23 Allied Farmers announced that the extension of its Westpac banking facilities to March 31, 2011 was granted as part of an agreed series of debt retirement and restructuring initiatives, and that these initiatives had agreed milestones, which, if not met, would result in Westpac having its usual rights as lender.

On August 20 Allied Farmers announced that its wholly owned subsidiary, Allied Nationwide Finance, had been placed into receivership by its debenture holder trustee, New Zealand Guardian Trust.

The receivership meant that the milestones for the agreed Allied Farmers debt terms, including debt retirement and its restructuring initiative, will require renegotiation.

Allied Farmers said then that it was in constructive discussions with Westpac and the lead manager of its previously announced rights issue.

Radio New Zealand reported that the company held talks with an unnamed lender over the weekend, and hopes to reach an agreement with it in the next couple of days.

Such a deal would result in the severance of its relationship with Westpac.

- NZPA