Allied Farmers denies it will lose $10m

Vatulele resort in Fiji is at the centre of the loan issue. Photo / Supplied

Hawera-based rural services business and Hanover Finance victim Allied Farmers has denied it will lose about $10 million on a loan for a resort project in Fiji.

But official court documents reveal the amount borrowed in 2009 was $11.6 million, without accrued interest.

This week, Allied issued a statement denying any $10 million loss from the Fiji project, saying speculation it might need to write off that amount as a result of receivership of Vatulele Joint Venture Trustee was "widely inaccurate and ill- informed".

ANZ Bank (Fiji) appointed receivers and managers to Vatulele Joint Venture Trustee, guarantor of a loan made by Allied to the Waterfront Fund, which was secured behind the ANZ over the Vatulele Island Resort and associated development land, Allied said this month.

Allied bought Hanover's loan book in its ill-fated deal which was backed by Hanover investors, now Allied shareholders.

Last August, in the High Court at Auckland, Judge Tony Abbott issued a decision saying that by September 2009, Hanover claimed $11.6 million on the Fiji loan.

He ruled in favour of Hanover in the case brought by Waterfront Capital Trustee I and others.

"This is a dispute over the enforceability of a loan advanced by Hanover Finance for the purchase and development of a tourist resort in Fiji. It is before the court on an application to set aside statutory demands which Hanover has served on the 18 applicant companies, requiring repayment of the loan," he said.

"The Waterfront Fund made a number of unsuccessful attempts to refinance the loan, before and after its due date. It remains outstanding.

"Hanover has made demand on WLL and each of the special purpose companies for the amount due under the loan agreement - $11,622,812.09 - as at September 10, 2009," the judge said.

Allied still has hopes for the Fiji resort, which continues to trade and advertise.

"The board has not yet determined the level of any writedown as it awaits more information," Allied said. "However, the carrying value of the loan is substantially less than $10 million. The board considers that resort is an excellent and well-run asset that should receive excellent value in the event the receivers and managers elect to sell it."

VATULELE
* Fijian island resort.
* 18 private bures (huts).
* Short flight from Nadi.
* Still operating and advertising.