Allied finance company disputes notice of breach

Allied Farmers' finance company has suspended its prospectus and is in talks with its trustee about a disputed breach of its trust deed finance ratios.

Allied Nationwide Finance yesterday received notice from Guardian Trust that it was in breach of one of the financial ratios and has 14 days to remedy the situation.

The finance company is covered by the Crown deposit guarantee scheme until October 12. The board and management of the company do not agree with the trustee's view.

Allied Nationwide's financial statements for the year ended June 30 are being audited, which should be completed by the end of this month.

The company said it has presented financial information as at June 30 to the trustee which shows that the relevant ratio of total liabilities to total tangible assets was, and is, complied with. It continued to meet all its financial obligations.

Pending resolution, the company decided to immediately suspend its prospectus. Allied Farmers said it would update the situation on Monday.

Allied Nationwide reported a net group loss of $6.4 million for the year ended June 30, 2009. Total group assets then were $360 million, including $48 million of cash and $292 million of loan assets.

- NZPA