Allied misses payment - seeks deadline extension

Allied Farmers chairman John Loughlin Photo / Dean Purcell

Allied Farmers said its Allied Nationwide Finance unit missed a deadline to repay debentures yesterday and has sought an extension of time to remedy a breach of a Trust Deed ratio which is due to expire today.

The ailing financial group is awaiting a response today from the trustee, New Zealand Guardian Trust, which has the power to make or break the company under the terms of the deed.

Allied's fortunes have collapsed in the wake of its acquisition of financial 'assets' from Hanover and United, which are worth less than a quarter of the purchase price paid with a massive issue of new shares.

"Up until yesterday, Allied Finance had continued to meet all its financial obligations, including repayment of maturing debentures," chairman John Loughlin said in a statement.

"However, as the capital and funding initiatives under consideration by the Allied group require third party commitments and NZGT approvals which had not been received by last night, it has transpired that Allied Finance did not pay debenture maturities due for payment yesterday," he said.

Allied Finance expects to complete "an initial transaction today" that will result in payment of debenture maturities now due and has asked Guardian Trust to agree to the transaction and grant "a short extension to the deadline originally imposed."

Allied said it will make a further statement today once it has heard friom Guardian Trust.

When the Trust Deed breach was disclosed last week, on the ratio of total liabilities to total tangible assets, Allied said it didn't agree with Guardian Trust that a breach had occurred.

Its shares last traded at 2.7 cents and have shed 73 per cent of their value this year. More than 95 per cent of the stock is held by former investors in Hanover and United.