Allied Farmers hocks off ex-Hanover loan to finish repaying Westpac

Rob Alloway. Photo / Hawkes Bay Today

Allied Farmers has sold a former Hanover Finance loan to an undisclosed party, allowing the company to complete repayment of its facility with Westpac Bank.

Allied, which unsuccessfully tried to reinvent itself as a major lender by taking on the Hanover and United loan books in a debt-for-equity swap, said it's entered a conditional agreement to sell one of the Hanover loans, which will cover the $2 million left owing to Westpac.

The transaction is expected to conclude next week, and Allied will give an update on its funding arrangements.

"I have been very pleased with progress over the past few months, which has seen us reduce our senior debt to Westpac from almost $17 million to nil post this deal, and removes a number of constraints from the business," outgoing managing director Rob Alloway said in a statement.

"This is another positive step for our restructuring plan."

Earlier this month the rural services firm announced the early settlement of its Five Mile property near Queenstown Airport and the successful outcome of its MAC Reeves court hearing in California.

That came around the same time it announced a $77.6 million loss in the year after it was forced to write down the value of the distressed Hanover and United loan books by a further $20 million.

The shares rose 3.9 per cent to 2.7 cents.