Tamsyn Parker

Tamsyn Parker is the NZ Herald's Money Editor

Allied Farmers faces second loan demand

Allied Farmers is a rural services business. Photo / Christine Cornege
Allied Farmers is a rural services business. Photo / Christine Cornege

Allied Farmers says one of its subsidiaries has received a demand from the Inland Revenue to pay back $3.7 million.

Allied Farmers Rural has 15 days to pay back the money or reach a compromise with the tax man otherwise the Inland revenue can commence liquidation proceedings.

It is the second loan demand the company has received this month.

On February 11 Allied received a demand from a lender to pay back $500,000 plus interest. The deadline for that loan to be paid is Friday.

Both demands are enforceable events of default under Allied's secured loan facility with Crown Asset Management - a company set up by the Government to manage the assets of five failed finance companies which were bailed out under its retail deposit guarantee scheme.

Allied transferred the remainder of its Hanover and United Finance property portfolio to Crown Asset Management in December in a deal worth $13.5 million.

Allied said it was in the process of discussing a proposal with Crown Asset Management and believed it would be able to reach an agreement to repay the debt.

Shares in Allied fell 0.8 of a cent to 1.2c in morning trading.

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