Allied in dispute over breach

Allied Farmers chief executive Rob Alloway. Photo Dean Purcell

Long-suffering Hanover investors will be hoping to get more clarity today after news on Friday that Allied Farmers - the listed company that bought them out - is in dispute with its trustee over the status of its finance division.

On Friday, Allied Nationwide Finance suspended its prospectus after Guardian Trust advised that it considered the company in breach of its trust deed.

Allied, a unit of Allied Farmers, said it didn't agree with the trustee and has shown the trustee unaudited accounts as at June 30 that confirm the ratio of total liabilities to total assets remains within the deed's requirements. The company is working with the trustee to resolve the issue, and suspended the prospectus pending resolution, it said.

Allied Nationwide's financial statements for the year ended June 30 are being audited, which should be completed this month.

Allied Nationwide continued to meet all its financial obligations, including repayment of maturing debentures.

Allied Farmers announced a partially underwritten $19.3 million capital raising on August 3. The capital raising is partly underwritten by McDouall Stuart Group.

Allied Farmers earlier negotiated a further extension on its banking arrangements with Westpac Bank as it continued to negotiate and develop several restructuring initiatives.

- Staff reporter, agencies