Trustee sounds alarm over Allied Farmers

Rob Alloway. Photo / Dean Purcell

The trustee of Allied Farmers' capital notes has written to the Companies Office about the financial state of the company but says it won't be commenting further on the letter at this stage.

The complaint was revealed by the troubled company yesterday as part of a market update. Allied Farmers managing director Rob Alloway, who on Friday announced he would resign from the executive role in December, said Trustee Executors had made Allied aware of its concerns.

Allied had been due to report on its financial result for the year to June 30 by August 30, but was given an extension until this Friday by the NZX because of the collapse of its finance company Allied Nationwide.

Allied Nationwide went into receivership on August 20 with investors covered by the Government's deposit guarantee scheme.

"While Allied Farmers expects to report that it remains in compliance with its covenants in respect of the capital notes, Trustees Executors has an ongoing obligation to consider and report on the financial position of Allied Farmers generally, and has made Allied Farmers aware that it has written to the Companies Office in relation to the financial state of Allied Farmers," the company said.

Allied has $12.605 million in capital notes listed on the New Zealand debt market which are not due to mature until November 2011.

The company also said yesterday it had been awarded a further interim distribution of about $3.5 million relating to a luxury development in Beverly Hills, California, known as the Maison Reeves Condominiums.

The development was financed in part by Hanover and has been in receivership. This is the second distribution. More than $6 million was received in June.

The company said it was seeking to brief relevant stakeholders, including Trustees Executors and the Companies Office on the state of various initiatives, including the impending receipt of the Maison Reeves funds and other positive news expected shortly.

It was confident that the initiatives, and an appropriate briefing, would help clarify the state of Allied Farmers' financial position.

It's likely the Californian receiver can apply to the court in the next few months for a motion to make a final distribution of about $7 million to Allied Farmers.

"Given the work being undertaken on the accounts and also that a number of proposed actions are incomplete and subject to commercial sensitivities, and not capable of general disclosure, the position is that not all stakeholders can be fully up to date with developments at all times, and Trustees Executors' action therefore necessarily occurred without it being aware of the latest information or developments," Allied Farmers said in its statement.

A Trustee Executors spokesperson said it had nothing to add to Allied Farmers' NZX release at this time.

Companies Office national enforcement manager Phil Day said it had yet to receive the letter but, once it was received, it would be considered and pursued further if any action was deemed necessary.