Allied Farmers post $20m loss in challenging times'

Allied reported an unaudited operating loss of $20.56 million for the six months to December 31, 2010. Photo / File photo

Allied Farmers reported an operating loss of $20.56 million yesterday after calling the six months to December 31 an extremely challenging time for the company.

Allied said the collapse of subsidiary Allied Nationwide Finance, in receivership, has placed "considerable pressures on liquidity".

This coupled with the loss of Allied Nationwide Finance as a finance source and the delay in round two of a proposed $9 million capital raising, has meant Allied has had to greatly reduce its working capital.

Allied reported an unaudited operating loss of $20.56 million for the six months to December 31, 2010.

This is a $4.88 million decrease on the same figures for 2009 - Allied reported a $15.68 million loss to the end of December, 2009.

Impairments of $12.62 million of assets relating to Hanover Finance and United Finance, and a $1.06 million loss relating to the receivership of Allied Nationwide Finance has been included in that operating loss.

Allied said it was still carrying $13.29 million of debt transferred from Hanover but had "a strong focus" that in the second half it would be able to repay or restructure a large part of this debt.

Allied said it had continued its process of realising former Hanover assets, and while some properties have been sold below valuation, some have been realised at valuation and others above.

During the half-year reporting period, Allied was unable to reach a "sensible arrangement" with Matarangi Beach Estates, which resulted in it being placed into receivership.

Allied Farmers Investments paid more than $2 million in interest and fees to Matarangi and the concern was the equity in the property would further erode, Allied said.

Allied said it was pursuing and taking legal action against several delinquent borrowers to recover the debt.

Allied Farmers Investments has refused to pay the final $5 million outstanding to Hanover because of alleged material breaches of the contract when the former Hanover assets were transferred to Allied.

Hanover has begun legal action and this will proceed to litigation at the end of May.

This story has been changed from an earlier version, which incorrectly named South Canterbury Finance instead of Allied Nationwide Finance.