Allied managing director steps down

Rob Alloway says he only intended to be with Allied Farmers temporarily. Photo / Hawkes Bay Today

The shock departure of Allied Farmers managing director Rob Alloway will add another level of uncertainty to the business, the Shareholders Association says.

Alloway yesterday revealed that he would be stepping down from the management role although he will remain on the board of the troubled company.

The announcement follows chairman John Loughlin's departure and the receivership of finance arm Allied Nationwide just two weeks ago.

Shareholders Association chairman John Hawkins said Alloway's departure had come as a surprise and was not a good look for the company.

"It adds another layer of uncertainty coming on the heels of Loughlin's resignation."

Hawkins said the company was in a vulnerable position where it was reliant on its bankers. "I would have thought the bankers would like to see a bit more consistency in the staff."

But Alloway, who was seen as the driving force behind the company's acquisition of Hanover's loan book last December, said he had been contemplating resignation for a while.

"I joined the company in August last year and it was only ever intended to be temporary."

He said he had not been pushed to leave and the board had been disappointed by his resignation. "The board were pretty unhappy."

Alloway said it had been an incredibly tough job.

"I don't think anybody has been particularly kind to the board and management over the last year."

It was too early to say what kind of person might be hired to replace him.

But Hawkins believed it would be a tough ask to find someone keen to take on the job.

"The problem is you need a top performer and it won't be attractive to a top performer."

Alloway said he had given notice to allow a timely search for a new chief executive and a measured handover of the business. He said the time was right to step down from the "hands-on, day-to-day role" of running the business as the restructuring process which began about a year ago was nearing completion.

"With the restructuring process now coming to an end, and several asset realisations likely in the short term, the company will be in a different position in December when I step down," he said.

"My key goal was to establish a more stable financial platform and normalise the company's banking and other commercial arrangements."

He said the process was expected to be completed in the next few weeks, leaving the business with "substantially" reduced senior debt.

The company said on August 25 it had a senior debt totalling about $16.9 million, consisting of a multi-option credit facility of $14.4 million, and an overdraft of $2.5 million.

Allied Farmers said it needed to renegotiate with its bank, Westpac, because of the receivership of its Allied Nationwide Finance arm. That company collapsed last month owing $130 million to investors.

Last week, Allied Farmers was unable to provide its unaudited full-year results to NZX. It was given an extension until September 10. Alloway said it would meet the deadline.

The company had also put plans to raise new equity on hold for now, he said, and hoped to solve its equity issues though the sale of some non-core assets.

Alloway said that the company was close to finalising the saleof some former Hanover-owned assets.

"We are deep in negotiations on a couple of transactions."

Shares in Allied closed flat on 2.4c yesterday.