Allied Farmers says property asset values fall

Allied Farmers Ltd said the value of the property assets of the Hanover Finance and United Finance business it acquired last year have fallen further.

The fair value of the property assets has fallen to $87.5 million from $105.4m.

Allied Farmers said there was inherent uncertainty in the current market for this type of property. The company said at the half-year that the most disappointing position was the Kawerau Falls Station project.

Allied Farmers managing director Rob Alloway said that the value of the acquired loan assets was likely to be subject to an increase in impairment provisions.

"This work is under way as part of the process of preparing the June 30, 2010 financial statements, and it is too early to determine the extent of the impairment," he said.

On March 1 Allied Farmers announced an operating loss after tax of $15.68 million for the six months ended December 31, 2009.

It said then that the property and loan assets of Hanover Finance and United Finance acquired by Allied Farmers in December 2009 had been consolidated into the Allied Farmers balance sheet at a fair value of $175.52m.

The agreed transaction value attributed to these assets at the date they were acquired was $396.2m.

- NZPA