The merger of Allied Farmers Ltd's two wholly-owned finance companies has been formally approved and will be completed tomorrow, the company says.
Once amalgamated, Allied Prime Finance and Nationwide Finance would have more than $300 million in assets and around $36 million equity, under the name Allied Nationwide
Finance.
Allied Farmers group chief executive David Bale today said the amalgamation would be a significant step towards the group's stated objective to have more than $400 million of finance assets within two years.
John Mallon, who will be chief executive of Allied Nationwide Finance, said the focus would be on the continuing growth of rural, property, commercial and business finance activities.
On Monday, Allied Farmers said it had forecast an annual pre-tax loss of $4 million due to one-off costs, more than three times larger than last year's loss.
The company's rural and finance businesses had traded well, but costs from the closure of its Wanganui sawmill and integrating two finance companies would push the company into the red for the year ended June, chairman John Loughlin said.
The Hawera-based company expected to return to profit next year, forecasting a pre-tax profit of $7 million as it began to benefit from the sawmill closure and the increased dairy payout predicted by Fonterra.
Allied Farmers shares were unchanged today at $2.
- NZPA
