ALF - Allied Farmers Limited [Archive] - Page 3

Silverlight

25-08-2010, 04:52 PM

25 August 2010
BANKING FACILITIES UPDATE

On 23 July 2010 Allied Farmers announced that the extension of its Westpac banking facilities to 31 March 2011 was granted as part of an agreed series of debt retirement and restructuring initiatives, and that these initiatives had agreed milestones, which, if not met, would result in Westpac having its usual rights as lender.

On 20 August 2010 Allied Farmers announced that its wholly owned subsidiary, Allied Nationwide Finance Limited, had been placed into receivership by its debenture holder trustee, NZ Guardian Trust.

The Allied Nationwide Finance receivership has meant that the milestones for the agreed Allied Farmers debt terms, including debt retirement and its restructuring initiative, will require renegotiation.

Allied Farmers is in constructive discussions with Westpac and the lead manager of its previously announced rights issue.

Allied Farmers notes some media speculation today on the extent of its senior debt to its senior lender Westpac. Allied Farmers wishes to ensure the market is correctly informed. Allied Farmers currently has senior debt totaling $16.9 million, consisting of a multi option credit facility of $14.4 million, and an overdraft of $2.5 million.

minimoke

25-08-2010, 04:56 PM

[
Allied Farmers is in constructive discussions with Westpac and the lead manager of its previously announced rights issue.

May as well go to SCF and cut / paste their announcements - starting to sound the same.

Beagle

25-08-2010, 05:10 PM

May as well go to SCF and cut / paste their announcements - starting to sound the same.

Classic LOL !! By the way how do you have "destructive" discussions, other than the obvious, (a big argument with your wife in front of the kids), so what the hell's the point of calling these discussions "constructive" other than to imply the lenders are actually quite pleased to have the business, which clearly they're not.

A more correct term other than the above euphamism would be SCF / ALF are in "extremly urgent" discussions, at least that would be calling it what it is.....i.e. it could be argued that the way they write these Press Releases is deliberatly calculated to deceive, or perhaps I'm just being a bit pedantic.
OTOH I could just be sick, like I suspect many others are, of all the b.s. !!

Morpheus

25-08-2010, 05:47 PM

Interesting to compare these banking facility updates ...

August 25: Allied Farmers currently has senior debt totaling $16.9 million, consisting of a multi option credit facility of $14.4 million, and an overdraft of $2.5 million.

June 25: [I]As of today the amount outstanding under its Westpac loan facility is $16.5 million ($21.0 million as at 30 June 2009). The loan facility, and an overdraft facility of $2.5 million.

winner69

25-08-2010, 06:45 PM

Lizard .... you caused this media speculation and obviously wnat you and the NBR sprculate is a load of codswallop .... seems like nothing untowaed after all and all will be resolved in the next day or two.

Now the market is 'correctly informed/ we all can sleep easy tonight

Was the market 'correctly informed' about Resimac last year?

Balance

25-08-2010, 09:19 PM

winner69

25-08-2010, 09:31 PM

And NOT one word on the debt that ALF/Hanover brought over when took the Axis property assets off Watson/Hotchin?

They only concerned about 'senior debt' Balance

Silverlight

30-08-2010, 02:00 PM

ALF don't have to report their results until 10 September (http://www.nzx.com/markets/NZSX/ALF/announcements/4075519/ALF-Market-Announcement-Preliminary-Result)now.

Alan3285

30-08-2010, 02:10 PM

ALF don't have to report their results until 10 September (http://www.nzx.com/markets/NZSX/ALF/announcements/4075519/ALF-Market-Announcement-Preliminary-Result)now.

Yeah - Not really unexpected. All the going concern assumptions in ANF will have to be shifted.

Alan.

Silverlight

03-09-2010, 10:52 AM

3 September, 2010
Alloway to Step Down From Allied Farmers

The Board of Allied Farmers announced today that its Managing Director, Rob Alloway, is to step down from his current role in December this year. Mr Alloway will remain on the Board of Allied Farmers and its subsidiaries in the meantime. Mr Alloway has given notice to the Board to allow a timely search for a new CEO and a measured handover of the business.

Mr Alloway said “the time was right to step down from the hands-on, day-today role of running the business as the restructuring process which began about a year ago was nearing completion.”

The Board acknowledged Mr Alloway’s strong and insightful leadership during a period of tremendous change, and said that whilst they were disappointed Mr Alloway was changing his role from an executive, his ongoing involvement as a director means Mr Alloway will continue to contribute to the Company.

“With the restructuring process now coming to an end, and several asset realisations likely in the short term, the company will be in a different position in December when I step down,” said Mr Alloway. “My key goal was to establish a more stable financial platform and normalise the company’s banking and other commercial arrangements.”

MrAlloway said that “we are expecting this process will be completed in the next few weeks leaving the business with substantially reduced senior debt and feel it is right to now give the Board time to identify a new CEO to take the company forward after a challenging period.”

Mr Alloway said staff, suppliers and shareholders had been very patient and that patience and loyalty had given the Board and management the time they needed to navigate through a difficult process.

“We’ve had to make some very tough decisions along the way but we are now close to reaching the stable ground we need to rebuild what I still believe will be a very sound and respected rural services business.”

Stranger_Danger

03-09-2010, 11:05 AM

Hahaha.

"With the restructuring process now coming to an end, and several asset
realisations likely in the short term, the company will be in a different
position in December when I step down,"

Oh yes Rob, indeed it will! Does that position start with a B?

winner69

03-09-2010, 12:43 PM

That was a real positive announcement

Rob has done a good job ... taking ALF from the verge of going under to something that now may, just may, have a life going forward

Current market cap of $51m without the hassles of ANF could make this a goer .... but nobody will ever think much positive about ALF

Balance

03-09-2010, 01:14 PM

Rob is associated with the Hanover/ALF merger. He has to go so that the past is left behind.

Alan3285

03-09-2010, 01:31 PM

Rob is associated with the Hanover/ALF merger. He has to go so that the past is left behind.

That's probably right.

Previously I thought that the people with the real gripe in this were the original ALF shareholders (not me BTW), but I am beginning to think that ALF without Hanover would have been dead anyway, so they were kind of thrown a lifeline (albeit into a rather leaky liferaft, but possibly better than nothing).

If so, Alloway has perhaps done okay, but is definitely a strong link to the past.

Alan.

J R Ewing

03-09-2010, 02:20 PM

Rob is associated with the Hanover/ALF merger. He has to go so that the past is left behind.

Does that imply we are at the bottom and the current uptrend (0.1c up since yesterdays close) is the start of the recovery?

bermuda

03-09-2010, 04:14 PM

That's probably right.

Previously I thought that the people with the real gripe in this were the original ALF shareholders (not me BTW), but I am beginning to think that ALF without Hanover would have been dead anyway, so they were kind of thrown a lifeline (albeit into a rather leaky liferaft, but possibly better than nothing).

If so, Alloway has perhaps done okay, but is definitely a strong link to the past.

Alan.

Alloway is getting out now before his incompetence gets fully exposed. Hanover sold ALF down the drain becusae due diligence was not carried out on properties that had encumbrances

peat

03-09-2010, 06:57 PM

cue movie of crashing jet plane with pilot ejecting at the very last moment

Dr_Who

03-09-2010, 08:44 PM

cue movie of crashing jet plane with pilot ejecting at the very last moment

You onto it Peat.

Lizard

11-09-2010, 07:39 AM

Liz - wonder what a ALF balance sheet will look like without the ANF part in it .... still sick as I say

I'm guessing $40m equity tops. Debt down to $70m ish? Maybe still a bit higher than that.

Looks like $31.0m equity - or $44.5m prior to losing ANF. Debt about $73m. They say NTA 2.2cps, but taking into account ANF, bonus shares and 90m issued 4 Aug (presumably not cancelled ), I'd say 1.37cps.

Been a good trade for a few this week on Monday's announcement I would think. But difficult to see much value at current price unless they've impaired assets well beyond realistic prices.

Can't see any signs that Hanover assets went to ANF, so that is good. Net assets recovered are now allowed for at $94.3m and total assets acquired were offset by $45.9m of loans, so presumably they've allowed for $140.2m of total assets. Less $9.4m they say they've recovered and maybe allow to have spent the $7.5m of cash - so should be able to find at least $123.4m of ex-Hanover assets still on the books? About equivalent to the amount in Property Inventory, Property Investments and Loans & Advances remaining in ALF, so probably okay?

Silverlight

23-09-2010, 01:45 PM

Lizard were you using the pro-forma numbers?

Total L: 112m
Total A: 143m

NTA: 29.785m or 1.51 cps on current 1.9b shares. (Have not added in the bonus securities)

Major assets
Loans: 43.6m
Invt - Prop: 38m
Invest Prop: 41.9m

Are these 3 all from Hanover?

They lost 10m last year if you take out impairments, and the 5.9m cost of Hanover.

Too biggest expenses are Cost of Goods sold, and salaries, who actually rates there services business and stores going forward? Are they competitive against the like of PGW, Bunnings, Farmlands etc?

mikew

30-09-2010, 08:26 PM

Today is the last day it can file the audited accounts before facing suspension from the stock exchange.

It is interesting to see what's happening tomorrow.

whatsup

22-10-2010, 10:37 AM

Alan3285

22-10-2010, 01:33 PM

I heard on last nights 1zb's business programme that Allied F had repayed its bank debt and can now go ahead with the capital raising via a cash issue, from what I understand its rural business is going well with a very loyal farmer base and if they can succefully recapitalise the company it should has some future.

Yep - They made a formal announcement to the NZX that the Westpac loan was fully paid off, and their overdraft facility is now only $250,000.

Also, they have re-negotiated the amounts owed to ANF (with the receivers of that company), so they won't be subject to an imminent call on those facilities.

Certainly looks like they are making good headway. I hate to say it, but I think the shares were potentially under valued at 1.6c yesterday, although I note that they are back up to 2c today. Just goes to show that I was wrong on the shares!

Alan.

Xerof

22-10-2010, 02:53 PM

I think the shares were potentially under valued at 1.6c yesterday, although I note that they are back up to 2c today.
Alan.

The Hanover lot will be delighted to hear that Alan - only another 20cents to go before they're back to debt for equity swap price

Alan3285

22-10-2010, 03:15 PM

The Hanover lot will be delighted to hear that Alan - only another 20cents to go before they're back to debt for equity swap price

Interesting perspective Xerof.

Personally, I don't believe that the Hanover investors would have gotten back the 83c in the dollar (or whatever it was supposed to be) had they stayed with Watson & Hotchins.

Your faith in the dynamic duo is ... interesting.

Alan.

Xerof

22-10-2010, 03:35 PM

Whoa there tiger - MY faith in the dynamic duo !!! Not here pal.

I was merely reflecting on how awful a mess this whole episode has become

Alan3285

22-10-2010, 04:38 PM

Whoa there tiger - MY faith in the dynamic duo !!! Not here pal.

I was merely reflecting on how awful a mess this whole episode has become

But do you think the Hanover investors have been badly served by taking up the Allied Farmers offer compared to staying with W&H and getting their

debt for equity swap price

Looks to me like it is possiuble they will have been well served by ALF?

Alan.

Xerof

22-10-2010, 06:48 PM

where there is life there is hope I suppose Alan

Alan3285

22-10-2010, 08:28 PM

There is always hope :-)

Lizard

12-11-2010, 05:31 PM

Can someone tell me where the Westpac and other party loans (total about $46m) secured over the Hanover estimates came from? Presumably (according to the ALF HY breakdown of acquisition) they were acquired as part of the Hanover assets? There are no cash inflows from borrowings to suggest they were new loans at HY10.

However, I can't find any reference in the ALF notice of meeting to acquiring any liabilities. Nor can I find any similar loans in the Hanover Charging Group accounts of Jun 2009. So I am curious as to at what point these loans were taken out, where the cash went and where they were accounted for in the process of transferring Hanover assets to Allied.

...according to the HY accounts, there is $31m from Westpac and $15m from other parties (note 4) secured over Hanover Assets and included in the reconciliation of acquired value (note 10). These are on top of the other Westpac loans to ALF. So there still reads to me to be $79m+ of ALF debt of which $46m is secured over Hanover assets. The $46m is is borrowings by the Asset Management Services group (i.e. the bit set up to manage Hanover assets). Terms for this debt were still under discussion at HY reporting and therefore classified as "current".

I would think it might be of some significance to ALF holders and Hanover investors as to how this debt came about so as to know whether there was any transfer of value or rights of which investors were unaware.

...have found the Hanover notes (http://www.scribd.com/doc/23349060/Hanover-EM-Book-Final) now, and you are right. These assets were part of the Axis Group which was contributed to Hanover Finance as part of the Shareholder Support package at the time of the debt restructure. So the debts came as part of the combined $34m in support package assets acquired in the ALF-Hanover deal.

Looks like the loans acquired with the Hanover assets (that they failed to clearly mention in the paperwork to investors) are coming back to roost. Seems at least one $19m loan against Matarangi Beach is with HSBC and has been called in. Seems Matarangi was a net value $26m of the support package, last recognised at $7m net of debt and now likely to be somewhat less...

It seems to me that presenting the support package assets at net value as part of the deal without making clear those values included debt facilities and outlining the terms was misleading. Especially so in assembling a pro-forma balance sheet that simply showed the net value rather than asset/liability components that clearly had to be consolidated.

More evidence suggesting that Hanover debenture holders would likely have been better off under a liquidation.

percy

12-11-2010, 06:49 PM

Looks like the loans acquired with the Hanover assets (that they failed to clearly mention in the paperwork to investors) are coming back to roost. Seems at least one $19m loan against Matarangi Beach is with HSBC and has been called in. Seems Matarangi was a net value $26m of the support package, last recognised at $7m net of debt and now likely to be somewhat less...

It seems to me that presenting the support package assets at net value as part of the deal without making clear those values included debt facilities and outlining the terms was misleading. Especially so in assembling a pro-forma balance sheet that simply showed the net value rather than asset/liability components that clearly had to be consolidated.

More evidence suggesting that Hanover debenture holders would likely have been better off under a liquidation.

No surprises there Lizard.Yes I think the Hanover debenture holders would have been better off under liguidation.The liguidator would have gone after the 'givers' of the 'support package'.May have even encuoraged the 'givers' to find their cheque books.!!! Now that would have been fun.

Lizard

18-11-2010, 02:21 PM

Some strong words in the latest ALF release as Matarangi Beach Estates goes into receivership. The blame game is probably of no help to former Hanover debenture holders - after all, it was ALF who issued the prospectus to them offering shares in ALF. And it is difficult to say that ALF has suffered from the transaction - even if it hasn't turned out to be the miracle outcome it was portrayed as. ALF has still managed to use proceeds realised from Hanover assets to pay down it's own pre-existing debt, while making sure that it's own pre-transaction shareholders had the protection of the shortfall calculation. There was no equivalent benefit for Hanover investors who, with the loss of ANF and other ALF-related write-downs, are probably in negative on what they received from ALF.

Allied Farmers Limited Managing Director, Mr Rob Alloway said "it seems
obvious to us that the value of these assets in the audited 30 June 2009
financial statements, on which Hanover debenture holders were entitled to
rely at the time of acquisition, was unrealistic, as there is no way that the
market for this type of asset has deteriorated that much in such a short time
frame".

"This is an unfortunate trend we have seen with most of the property and loan
assets that were acquired, and further calls into question the real value of
the shareholder support package contributed by Messrs Hotchin and Watson at
the time of the Hanover moratorium. The investment community should have
expected far better oversight of the moratorium from Hanovers directors,
valuers, trustees and auditors".

Mr Alloway said "it is also disturbing to us that in the days leading up to
the receipt of the repayment demand from HSBC, we were, with the knowledge of
HSBC, approached by Mr Kerry Finnigan, representing an entity owned by Messrs
Hotchin and Watson, proposing a purchase of the MBEL assets for the loan
value of circa $19 million.

"Investors can draw their own conclusions as to whether it was a coincidence
that when we refused to sell the asset back to Hotchin and Watson, HSBC, who
in Mr Finnigan's own words have a "strong relationship" with Hotchin and
Watson entities (HSBC banks both Bendon and Cullen Investments), immediately
moved to demand repayment. The HSBC loan on MBEL we understand is also still
guaranteed by entities associated with Hotchin and Watson".

"The directors of MBEL will be keeping a close eye on any likely sales
process by the Receiver to ensure the best value is achieved for the asset
for the benefit of our shareholders. We would be disappointed if it turned
out that HSBC's demand for repayment was simply designed to enable the return
of the asset to Hotchin and Watson interests at a vast discount to the value
they transferred it to us in just November last year".

Alan3285

18-11-2010, 04:33 PM

Good stuff eh!?

Lizard

18-11-2010, 05:19 PM

I just came across this excellent Dominion Post article (http://www.stuff.co.nz/business/opinion/4020997/Allied-Farmers-moves-deeper-into-repayment-mire) by Tim Hunter (dated 13 August) that I hope they won't mind being copied here as it makes for a fairly good summary on the debt issues (though doesn't make clear that they remain non-recourse to ALF):

Allied Farmers moves deeper into repayment mire
BY TIM HUNTER - The Dominion Post
Last updated 10:08 13/08/2010

OPINION: As Allied Farmers twists and jerks on the gibbet of its desperate cash shortage, the figure of Mark Hotchin can be imagined watching from the front row, knitting.

Released from the onerous obligations of Hanover Finance when Allied bought its assets, he can afford to be a bystander, although one who knows more than most how long Allied can survive the noose without succour.

When defunct Hanover offered investors a moratorium deal in November 2008, Mr Hotchin made much of a shareholder support package in which he and business partner Eric Watson transferred property to Hanover and its sister United Finance. Those assets were worth $66 million, he said. Add in cash commitments and the pair were tipping $96m of their own into the pot for the benefit of investors owed more than $500m.

The real value of that property was queried at the time, but Allied is now discovering its inclusion in the deal was as supportive as throwing a drowning man a lead- filled lifejacket.

Why? Because the Hanover property came with debt that is eating up cash.

At the time of the moratorium, it took careful scrutiny of the scheme's documents to glean much information about the debt attached to the shareholder support. The properties transferred were in the Axis group of companies and comprised land and developments at Matarangi Beach Estates in the Coromandel, Clearwater Resort in Christchurch and Jacks Point in Queenstown.

They were collectively valued at $40m with a further $26m in a second-ranking loan to Matarangi Beach Estates. The $40m was a net figure, calculated by subtracting the debt owed on the properties from their apparent value, but how much debt was owed and to whom was not made clear.

When Allied bought the Hanover and United assets, the debt was thought so insignificant it barely warranted a mention in the offer documents. A table detailing what Allied was buying gave liabilities as zero, while assets were $396.2m, including the Axis companies as worth $34m.

It's likely many Hanover investors would have believed this was true - that only assets were being transferred and they had no residual liabilities to worry about.

But there was a hint of warning in a letter from Hanover chairman David Henry to investors last November. He said Allied could be a better prospect because it would have: "An ability to pay down the first mortgages over the Axis property assets transferred under the debt restructure support package, which otherwise cause increased pressure on cashflow and the realisation programme for these assets."

Investors should have already been aware the Axis properties could be worth nothing, but this was the first time they had been told the debts could be bleeding precious cash. Details of the debts were not provided by Hanover until it published its 2009 financial statements four months ago.

There was $21.2m owed to a bank by Matarangi Beach Estates, $11.4m owed to a bank by Lifestyles of New Zealand Queenstown and $4.4m owed to a bank by Clearwater Hotel. All the loans were in breach of their bank covenants, and since December, those debts are on Allied's balance sheet, not Hanover's - nor that of Messrs Hotchin and Watson. They make a big difference.

Allied has been struggling to renegotiate its debt to Westpac for $19.5m, a facility that was due for repayment in July but has been extended to next March on the understanding Allied will raise capital and restructure.

Its debt on the Hanover properties is much bigger at $30.8m. As of December, all of it was classed as due within one year. After yet another asset writedown it is apparent Allied is in no better position to pay down those first mortgages than Hanover was - or, presumably, Messrs Hotchin and Watson were before the moratorium deal.

"Thanks for nothing," Allied's shareholders might say. Click clack, say the knitting needles.

I doubt ALF was as naive about the valuations as they would like to appear - PWC cautioned on the valuations on pg 60 of their 2008 report at the time of the debt restructuring. Surely ALF's own due diligence would have established the loan situation. And, naturally, ALF were not willing to extend any additional security to the loan that might have enabled a re-financing of the loan, thereby avoiding receivership.

Probably for the best - though from ALF's point of view, perhaps it is okay to get another $7m written off the value of the Hanover assets rather than take any risk to preserve the value? The holders of the bonus shares (i.e. pre-transaction ALF holders) will get compensated via the shortfall calc anyway.

Alan3285

18-11-2010, 05:32 PM

Balance

15-12-2010, 09:52 AM

Any positive implications for Allied Farmers?

http://www.stuff.co.nz/business/industries/4458178/Mark-Hotchin-in-High-Court-action

As for Hotchin saying that he is unaware what the hearing is about - he must be kidding, right?

evilroyrule

10-02-2011, 04:56 PM

belg. if someone was to buy the ailing alf or even merge, what wld that do for the sp. i was going to take a punt given i cant seem them just letting this sit there

kanejones

16-02-2011, 01:13 PM

Hi evilroyrule, did you end up taking a punt? It seems that very little is going on at the moment.

Does anybody have an idea of how a merger or t/o would affect the sp?

evilroyrule

16-02-2011, 08:40 PM

Hi evilroyrule, did you end up taking a punt? It seems that very little is going on at the moment.

Does anybody have an idea of how a merger or t/o would affect the sp?

na, deja vu dominion finace when i did some serious dough. sniffing for some info, looking grim me thnks:(

percy

16-02-2011, 09:00 PM

na, deja vu dominion finace when i did some serious dough. sniffing for some info, looking grim me thnks:(

Praise be given!!! No backdoor action here my friend,only out the backdoor.!!!

evilroyrule

16-02-2011, 09:19 PM

ha ha. it was my wishful thinking of a merger cum backdoor play. still light there, faintly. i will be back if i hear the drums beating my good friend percy. for now, the fat lady is warming up her tonsils....

did you like my word play?

percy

16-02-2011, 09:26 PM

whatsup

16-02-2011, 09:48 PM

GTM 3442

19-02-2011, 11:57 PM

With the possible t/o of Wrightsons there heaps of cockies who would not want to deal with them now ( assuming that Wrightsons dont have the cocky by the short hairs ) and to that end they might find ALF attractive as a store and agent, just my thoughts - for what their worth .

The cockies were happy to move off enough ten years or so ago when Wrightson farmers Finance got sold off to Rabobank. They've had a long time to move to Allied Farmers if they wanted to. . . .

kanejones

25-02-2011, 03:19 PM

When will we hear the result of the court hearing between Allied Farmers and Hanover?

digger

25-02-2011, 03:29 PM

When will we hear the result of the court hearing between Allied Farmers and Hanover?

When the legal people feel they have made more than their fair share of income from the affair,as is always the case. Amen,next question.

kanejones

25-02-2011, 03:36 PM

Hi digger. Apologies for my ignorance, I am fairly new to the game. Is the decision likely to be days or weeks?

digger

25-02-2011, 06:43 PM

Hi digger. Apologies for my ignorance, I am fairly new to the game. Is the decision likely to be days or weeks?

Hi kanejones,
I would not have a clue was just trying to make a likely comment that will in the end probably be true. I would say weeks or months if money can be made out of draging it out. Usually the only way to hurry up a decision is when one side runs out of money. then the solictors lose interest.

Balance

25-02-2011, 06:47 PM

Hi kanejones,
Usually the only way to hurry up a decision is when one side runs out of money. then the solictors lose interest.

As true as it gets.

But then, many of them are not aware that there is a special place reserved in hell for solicitors and lawyers who actively promote litigation, acrimony, disputes and ill-will so that they get their chargeable hours up.

Lizard

01-03-2011, 04:57 PM

A struggling half year report now out.

Probably this bit says it all:
Going concern and liquidity
The financial statements have been presented on the going concern basis. The cash flow forecasts of the Group indicate that in order for there to be a reasonable expectation that the Group have adequate resources to continue operations for the foreseeable future there will need to be:
• continued realisation of financial and property assets of Allied Farmers Investments Limited;
• agreement of arrangements with rural merchandise suppliers and other creditors;
• collection of the balance of the Allied Farmers Rural Limited revolving credit facilities;
• completion of a successful capital raising or other initiatives being pursued; and
• factoring of the rural services merchandise debtors with a financial institution.

winner69

01-03-2011, 05:11 PM

A struggling half year report now out.

Probably this bit says it all:

Struggling is an understatement ... to sumamrise all those bullet points ....MUNTED

Alan3285

02-03-2011, 10:15 AM

The remaining capital figure is still (just) above the (nominal) value of the bonds so, theordetically, they are still worth 100c in the dollar:

ALF Financials to 31 Dec 2010 (http://www.interest.co.nz/sites/default/files/ALF%20financial%20statements.pdf)

Further losses will impair that of course, but the bonds are currently trading at around 46c in the dollar, presumably with players factoring in further losses.

Alan.

kanejones

02-03-2011, 11:05 AM

The shareprice is starting to look pretty grim...

Newman

02-03-2011, 11:07 AM

Alan3285

02-03-2011, 11:27 AM

Yep - Trades at 1.5c now.

Bearing in mind too that those figures are 31 Dec 2010, so its quite possible that all of that remaining $12m of equity has been eroded by now.

To be honest, I'm not actually sure where the bonds are in line. They could very well rank ahead of any unsecured creditors at least, and possibly ahead of the IRD / employees etc which would make them much less exposed at this point than I was assuming, but I haven't ploughed through the accounts / notes to the accounts and / or the trust deed to find out.

Alan.

Alan3285

02-03-2011, 11:32 AM

The $10m notes will be converted into shares or new notes, as NZF will do soon. It would high risk to buy ALF010 as the company might disappear in a couple of years.

LOL!

Buying ALF010 has been high risk for well over a year now - they were always a 'punt'.

To be fair, they have always paid the interest on time as far as I recall, and depending on where you bought them, the returns have been good, so if you mentally subtract say, 10% interest, and regard the remainder of the interest as a return of capital, then your net cash investment is likely dropping off a bit.

Still, they are definitely a punt!

If they do convert to shares, in theory, would they become around something like 800m new shares at nominal value of the bonds, and 1.5c share price?

I am doing:

$12m bonds divided by $0.015 to get 800m shares?

If so, and the share price hits 1c then:

$12m / $0.01 = 1.2b new shares?

Just guessing!

Alan.

minimoke

29-03-2011, 02:44 PM

I am doing:

$12m bonds divided by $0.015 to get 800m shares?

If so, and the share price hits 1c then:

$12m / $0.01 = 1.2b new shares?

Just guessing!

Alan.
Time to do your sums again Alan. SP now at an all time low of $0.008

Tony Two Gloves

29-03-2011, 03:46 PM

All these Finance companies appear to be having a race to see who can get to 0.001 first, ALF is in front, Geneva closing quickly and NZF not out of the picture, who will the winner be? Answer, not anyone that has shares in any of these entities !!

winner69

30-05-2011, 04:19 PM

So hardly anybody left to do the hard work .... calling in contractors to help .... maybe the corporate undertakers would be a better bet

Betcha the tea lady has gone .... oops I forgot they couldn't afford one

What an utter disaster this whole fiasco has been

Lizard

30-05-2011, 04:29 PM

Any chance they'd get RECL in to manage the AFI assets?

percy

30-05-2011, 06:06 PM

Any chance they'd get RECL in to manage the AFI assets?

Yeah right !!! assets?? !

winner69

30-05-2011, 06:35 PM

Yeah right !!! assets?? !

Could make life easier .... some of the assets in RECL are also encumbered to Allied Finance .... those who wanted cash went to anyone ... and they all fell over themselves to lend the money

minimoke

05-07-2011, 04:44 PM

So hardly anybody left to do the hard work .... calling in contractors to help ....
Steve Morrison heard your call - he's just taken up the job as head of Allied Farmers Rural. Before you can blink, a big chunk of that job gone now the merchandising division is to be closed down.

Lizard

03-08-2011, 04:23 PM

I see the rural stores are gone. Is this the whole of the Rural Services segment of ALF? Would that mean the remaining business is now pretty much just the Asset Management business, or sell down of ex-Hanover assets?

If I was a shareholder, I would find today's announcement a little info-lite. Are they in quiet liquidation mode, and, if so, wouldn't this sale require shareholder approval under rule 9.1.1 (a)? I guess they can get away with not needing a vote under 9.1.1 (b) if the assets were sold for less than $10m?

Hard to see why anyone is paying more than NTA for shares (around 0.6cps) - I would have thought a discount would apply and a price of 0.4cps or below would be more fitting.

http://img.villagephotos.com/p/2006-8/1204598/listingrule9_1.gif

Kees

03-08-2011, 04:43 PM

Hard to see why anyone is paying more than NTA for shares (around 0.6cps)

not hard at all up to 1 on the news

Lizard

03-08-2011, 04:47 PM

Hard to see why anyone is paying more than NTA for shares (around 0.6cps)

not hard at all up to 1 on the news

Kees, I am genuinely interested in how you would justify 1cps?

minimoke

03-08-2011, 04:59 PM

Kees, I am genuinely interested in how you would justify 1cps?
With respect to Kees, doesn't matter what he thinks. The market has come in with a trade at 1 cent. Thats the current valuation of this stock.

bung5

03-08-2011, 04:59 PM

Even taking the NTA at 0.6c a share seems a bit risky. NTA was 7c a year ago.... just keeps falling with the write downs on the hanover loans

Lizard

03-08-2011, 05:20 PM

With respect to Kees, doesn't matter what he thinks. The market has come in with a trade at 1 cent. Thats the current valuation of this stock.

Oh, get over it Mini. We've all heard that "the valuation is what the market says it's worth" line a hundred times. Personally, I don't think that excludes discussing some other method of valuation for those that believe the market is not 100% efficient! :P

Kees

03-08-2011, 06:06 PM

dont have to justify market sets the price not downrampers or up rampers for that matter.

Lizard

03-08-2011, 06:13 PM

Oh, okay. I thought you were saying that the shares were worth 1cps (and not, say, 0.4cps) for a reason. But seems your reasoning is that you might as well buy them at 1cps because that is what the last person was prepared to pay? On that basis, I guess there is no financial reason to discuss the merits of any particular shares, since they would all be priced correctly. Buying decisions are purely whether or not to be in shares at all (and after that, whatever form of dart-throwing you prefer)?

Not sure what the downramping/up ramping refers to. That I am attempting to move the market?

Rusty

03-08-2011, 06:19 PM

There was only $4600 ALF traded today and it closed at 0.9c. So yeah I dont think there was much reaction to the news.

minimoke

03-08-2011, 06:21 PM

Oh, get over it Mini. We've all heard that "the valuation is what the market says it's worth" line a hundred times. Personally, I don't think that excludes discussing some other method of valuation for those that believe the market is not 100% efficient! :P
Fair enough comment - though trying to value ALF is a near impossible job when you have holders who probably still believe they can maximise their profits despite being done over by Hanover and ALF management. This will bring some unnatural distortions to the market and consequently any valuation. Its an irrational and illiquid stock and any investment is frought as a buyer is unlikely to have a decent exit strategy.

Lizard

03-08-2011, 06:47 PM

Yes, I can understand it is a share that people feel emotive about and am sympathetic. I didn't own Hanover or ANF debentures or ALF shares, but I had invested in them in the past and I did manage to get caught out on Strategic, St Laurence and Dorchester. Whether or not the Hanover-ALF deal was better or worse than alternatives (for either party) is speculation - rather like choosing which patch of quicksand would be better to stand on.

Where I was coming from is that it appears to me that (without saying so), they appear to be in a liquidation strategy. If that is the case, then usually the value is driven by NTA, less costs to liquidate. The only reason to move above that is if there is a reason to believe that the assets are under-valued on the books.

Halebop

03-08-2011, 07:46 PM

...The only reason to move above that is if there is a reason to believe that the assets are under-valued on the books.

The true asset value position looks like a cr@p shoot to me...

minimoke

10-08-2011, 04:27 PM

Taking MBEL as an example, I have no real issue with the disclosing it as an asset only (setting aside the actual valuation attributed which was recently $7m I think).

The debt within MBEL was and could never become a liability to ALF itself, and hence the minimum 'value' of MBEL to ALF was zero.

If they had disclosed it as, say, $26m of assets and $19m, then it would imply the maximum downside is $26m - that would have been misleading I think?

Alan.
How do you turn $45.8m into sand? Answer. Buy a beach property from hanover and watch it morph.

ALF announce today MBEL likely to be written down to zero.

(I wonder what Hotchin and Watson offered to buy MBEL for? It might have realised ALF something rather than this loss and the $3m approx they have forked out in interest and costs)

Lizard

18-08-2011, 09:57 PM

REPORTING UPDATE

Allied Farmers Ltd (ALF) advises that it is in the process of completing its 2011 year end unaudited financial statements. These will be released on 29 August 2011. This process includes the receipt and review by the Board of independent valuations of the remaining loan and property assets acquired from Hanover Finance and United Finance in December 2009 (the “Acquisition”).

ALF is yet to receive all of the valuations, and nor has it made an assessment of the overall impact of these adjustment and some other positive adjustments. Accordingly, whilst it is likely that these valuations will result in further impairments of these assets, at this point in time ALF is not in a position to draw any conclusions as to the overall extent of the impact of these valuations.

The audit of the financial statements will be completed during the month of September, with final reporting due by 28 September 2011. Once the audited accounts are available, ALF will be able to calculate and announce the extent to which the Bonus Shares issued to those ALF shareholders immediately prior to the Acquisition will be converted into ordinary shares. Given the likely extent of the impairment of the acquired loans and property assets since Acquisition, the calculation is expected to result in a significant number of new shares being issued to those shareholders.

When that conversion calculation is completed, ALF will be able to calculate and announce (at the same time) the number of additional shares required to be issued to institutional and professional investors who participated in the share placement on 3 August 2010. Again, this is likely to result in a significant number of new shares being issued to these institutional and professional investors.

This will be interesting... isn't it the closer the Hanover assets get to having been worth $0, the closer to infinite the number of ALF shares issued to the bonus share holders? Could see this turn into a scrap over the accounting. Wonder who holds most of the bonus shares? I think GPG sold out before allocation? Alloway?

But hey, institutional investors who got the placement in Aug 2010 get some too... there's a price adjustment to their shares AFTER the bonus share holders have got their lot... funny, but I don't see any mention of that in the NZX announcement at the time and I'm not sure if they told the ALF holders when they offered them the rights issue.

Then again, perhaps everyone will agree by then that the infinity shares are worthless...:eek2:

Lizard

18-08-2011, 10:21 PM

Wonder who holds most of the bonus shares? I think GPG sold out before allocation?

Actually, just looking at the companies office, it is possible they were still in... although there were reports of them selling out in the days before the transaction, it is possible they were still shown as the registered holders. Ithaca share parcel is shown as removed on the 24th Dec and bonus shares were issued 21st. Hard to call, as I'm not certain that Companies office dates will match the registry.

Lizard

19-08-2011, 08:39 AM

But it is the Price Adjustment Ratio on the $2.25m of placement at August that might be the real killer. From page 9 of the interim report:

Issue of Shares 3 August 2010
On 3 August 2010 Allied Farmers Limited issued 90,000,000 shares to institutional and professional investors at a subscription price of 2.5 cents per shar, $2,250,000 of proceeds were received. These investors also received a price adjustment right (“PAR”) to receive an additional number of shares in the company if the audited financial statements of the Group for the year ended 30 June 2011 establish that the net tangible asset backing (NTA) per share is less than 2.5 cents, after adjusting for the shares to be issued under the bonus securities issued in relation to the Hanover transaction. In the event that the NTA is less than 2.5 cents per share, each investor wil receive that number of additional new shares which, when added to the number of shares issued on 3 August 2010 is equal to the number of shares that they would have received if the subscription price per share had been equal to the NTA per share as at 30 June 2011 less 0.2 cents.

These placement shares were issued before the ANF receivership. Already by the end of December, NTA had fallen to about 0.63 cps. Take into account the issue of bonus shares and a probable further fall in the value of the Hanover assets, as well as possible sale below book value of the merchandising arm, and it might be possible that NTA ends up only a little above the 0.2cps. Subtract 0.2cps from that and it is even more likely we get close to a 0c issue price for the institutional investors.

This deal really bothers me. If we go back to the NTA at the time the placement, although the announcement was that investors would get 90m shares for putting in $2.25m at 2.5cps, it looks to me like the NTA was already less than 1.5cps at time of issue. Therefore, it seemed highly likely that investors would be allocated more shares under the PAR. Were existing holders made aware of this provision or given the opportunity to ratify? I can no longer access the meeting forms to know if there was a ratification vote with explanatory notes. The proposed rights issue to shareholders was cancelled and does not appear to have associated documentation issued - which is the other place this might have surfaced if shareholders were to have been offered the shares under the same terms (as implied by the notes to the interim report).

So potentially, a substantial portion of the company could now be allocated to professional and institutional investors who took part in a relatively small placement. Surely this has to run foul of something or other in the Corporations Act or the NZX listing rules... especially if shareholders were not given the chance to ratify (unclear to me at the moment)?

minimoke

19-08-2011, 01:20 PM

Then again, perhaps everyone will agree by then that the infinity shares are worthless...:eek2:
I suspect ALF holders will think this is great - the more shares they get the richer they will be.

Lizard

19-08-2011, 01:41 PM

I suspect ALF holders will think this is great - the more shares they get the richer they will be.

Actually, it doesn't look so much like the former ALF holders that are going to get the most now, but those who got the placement last August!!

Looks more and more like the Hanover assets had more value than ALF did pre-merger and yet ALF has protected every other stakeholders interests more than it has the bulk of its current shareholders (i.e. Hanover investors).

Lizard

19-08-2011, 08:59 PM

Oh, come on... can't let this thread be buried... doesn't anyone else have a bit of outrage to vent?

By my (probably dodgy) calcs, they only need to write off another $7.4m of tangible assets and the placement holders get infinity shares... oh and then in November, apparently the ALF010 get to convert at a 5% discount to the approx 0cps share price that will probably equate at that time... so really this farce is just getting sillier.

Lets just open the floodgates and let every placement have a hidden PAR. That way we can all keep guessing as to how many shares are actually being issued.

http://www.aussiestockforums.com/forums/images/smilies/ald.gif

winner69

19-08-2011, 09:12 PM

Lizard

19-08-2011, 09:20 PM

Just remember that the ones we have in the NZX compo are the special ones and will qualify for the extra shares .... ha ha

Haha. I bet if I give you the Special shares they will still turn out to be Upwardly Challenged.* http://www.aussiestockforums.com/forums/images/smilies/pesok.gif

*On a roll with the smilies today!

Lizard

29-08-2011, 06:30 PM

By my (probably dodgy) calcs, they only need to write off another $7.4m of tangible assets and the placement holders get infinity shares... oh and then in November, apparently the ALF010 get to convert at a 5% discount to the approx 0cps share price that will probably equate at that time... so really this farce is just getting sillier.

So confirmed that nta for ALF is now negative.

Anyone else want to double check the calc?

These investors also received a Price Adjustment Right ("PAR") to receive an additional number of shares in the company if the audited financial statements of the Group for the year ended 30 June 2011 establish that the net tangible asset backing (NTA) per share is less than 2.5cps after adjusting for the shares to be issued under the bonus securities issued in relation to the Hanover transaction. In the event that the NTA is less than 2.5cps, each investor will receive that number of additional new shares which, when added to the number of shares issued on 3 August 2010, is equal to the number of shares that they would have received if the subscription price per share had been equal to the NTA per share as at 30 June 2011 less 0.2cps.

Perhaps they have another out clause buried in the PAR agreement somewhere??? Otherwise, surely they would feel compelled to bring this issue more directly to the attention of the market?

minimoke

30-08-2011, 01:51 PM

So confirmed that nta for ALF is now negative.

Anyone else want to double check the calc?

In announcing the results the Board says This increase in shareholders’ funds is intended to preserve the Net Tangible Assets per share on issue."

I think you are doing a good job there - but its all such a moving target. We have a $43m loss, revenue down 45%, hanover assets down to $93m from $500m, cash on hand down to $137k.

I can't help but feel that no matter what number you come up with the ultimate value of each share will be nil. SP hit a low of $0.005 today

Lizard

30-08-2011, 02:43 PM

Yes, I know you are right Minimoke and it is just a matter of time as to who ends up splitting the remains.

ALF has had plenty to say about the decline in the value of the Hanover assets, but even so they still recognise a value of $93m from Hanover. Perhaps they need to explain more clearly to the former Hanover debenture holders where this gift went, since there is no equity left in ALF. (i.e. that it went to ALF's bankers and ANF receivers/creditors?).

At the time of the Hanover debenture holders decision, it was hard to know whether they would be better off with liquidation or ALF. Now the jury is in, it is clear that they could not have been worse off with liquidation. A lesson to remember.

minimoke

30-08-2011, 04:50 PM

At the time of the Hanover debenture holders decision, it was hard to know whether they would be better off with liquidation or ALF. Now the jury is in, it is clear that they could not have been worse off with liquidation. A lesson to remember.
Can't agree with you there. I think they answer was clear and it was to not go with ALF. At the time I was propping up Hanover and SCF divestors and given I was propping them up I felt entitled to advise them against going down the ALF route. They knew best - thinking they would do much better under ALFs management's and they had a glint of gold in their eyes. Since then I've withdrawn the majority of my financial support since there is no helping some people - especially if it is with my cash and I've seen the remants of their initial investment shredded even further. I'm kinda well over it now but nothing gets my ire up more than when I hear financial commentators looking forward to the next IPO for "Mom and pop" investors (aka Trademe) - I just think there is another set of lambs being readied for slaughter. (Not that I'm suggesting Trade me will be a rort - its just the sentiment of these numpty folks who will just throw their money at anything that sounds like a good idea without doing their home work)

J R Ewing

30-08-2011, 04:58 PM

Yep, it was an easy sell for the Hanover boys, there was a ray of hope going down the ALF route. Remember how close ALF got to being in the NZX50!

Master98

01-09-2011, 12:37 PM

Looks like ALF shares just as toilet rolls:)

minimoke

01-09-2011, 01:03 PM

Stock Exchange announcement today:

ALF
01/09/2011 11:57
MEETING

REL: 1157 HRS Allied Farmers Limited

MEETING: ALF: Annual Meeting and Director Nomination Dates

1 September 2011

ANNUAL MEETING AND DIRECTOR NOMINATION DATES

Allied Farmers Limited (ALF) is confident it will still be around in two months and consequently it advises that its annual meeting is to be held in Hawera at the TSB Hub, on Tuesday 29 November 2011 from 9.00am. Parking is available in the adjacent A&P Showground’s. Please tie dogs to the back of the ute. Zimmer frames may be stored in the cloakroom

Shareholders attending will receive a special dividend. This year it is a “Bring-a-plate” courtesy of the Taranaki Country Womens League. Holders are asked to limit themselves to one tea bag which will be available on request at the hot water urn.
For the purposes of NZSX Listing Rule 3.3.5, ALF advises that the opening date for nominations for directors to be voted on at this year's annual meeting is today and the closing date is 29 September 2011. All nominations must be received by 4.00pm on the closing date.

Nominations may only be made by a shareholder entitled to attend and vote at the annual meeting, and must be accompanied by the consent in writing of the nominated person.

Please send nominations, along with a précis of how the nominee will add value to the Board (preference will be given to any interior decorator with skills in wall paper hanging – holders will need to do something with their script) to:

Company Secretary
Allied Farmers Limited
PO Box 1888
Auckland 1140
End CA:00213252 For:ALF Type:MEETING Time:2011-09-01 11:57:13

This notice will be updated and readers should read at their own risk. ALF take no responsibility for any loss associated with this notice nor their decision to lead holders into Hanover investments.

moimoi

01-09-2011, 02:12 PM

Lol :-)

.......

minimoke

01-09-2011, 03:07 PM

Master98

01-09-2011, 04:09 PM

GTM 3442

01-09-2011, 04:24 PM

Oh god, please put holders out of their misery. Down to 0.03 now. Waterboarding isn't allowed nor should such a painfully slow death be acceptable.

Note to Direct Brokng: Can you please look at adding an extra decimal to the buy sell prices.

Now we are heading to <$0.01 what do we call something worse than a penny dreadful?

The answer is to do what Savoy Equities did a number of years ago. Trading at $0.001, they did a share consolidation. For one brief second, SVY were listed at $0.40. Then reality bit, and the price is now back down to $0.001.

Suspect that something similar may happen to ALF. It would look good to see the price go from $0.004 to $0.45 ! ! !

minimoke

01-09-2011, 04:29 PM

down to 0.003 not 0.03 :cool:
Opps, you are of course right - just so we are clear: $0.003

J R Ewing

01-09-2011, 04:36 PM

Perhaps NZX should do something about these shares trading for fractions of a cent. It can't be a good look for our exchange in general.

J R Ewing

01-09-2011, 04:39 PM

Perhaps NZX should do something about these shares trading for fractions of a cent. It can't be a good look for our exchange in general. And ALF is about to have a major dilution!

minimoke

01-09-2011, 04:56 PM

Perhaps NZX should do something about these shares trading for fractions of a cent. It can't be a good look for our exchange in general.
ALF investors like it though - they get more shares for their money!

GTM 3442

01-09-2011, 10:54 PM

ALF investors like it though - they get more shares for their money!

I should have thought they'd have preferred more money for their shares ? No accounting for tastes. . .

janner

02-09-2011, 04:44 PM

I have noticed that there has been considerable " Hoovering " of ALF shares this week..

As they slide into oblivion.

Their price is five eights of *******. ( Beyond my pocket ).

For what reason ??

Tax write offs.. ??

Etc...Etc.. Etc..

Thoughts ??

minimoke

06-09-2011, 01:34 PM

Oh god, please put holders out of their misery. Down to 0.03 now.
Now its hit $0.002

winner69

06-09-2011, 02:25 PM

Now its hit $0.002

1 million shares for $2,000 --- a bargain and a half eh mini

What a sad dismal joke this whole affair has been

Surely this will cement my bottom place in Lizards compo now - once a dog always a dog

777

06-09-2011, 02:33 PM

You can get on the top twenty list for about $6,000 investment. Not sure that investment is the correct word.

J R Ewing

06-09-2011, 02:33 PM

Most holders must be effectively priced out of the market through brokerage. You need a fairly substantial number of shares to make up a large enough parcel to be worth buying and selling. Still, just a 1c lift required from here and you're on a six bagger!!

minimoke

06-09-2011, 03:14 PM

1 million shares for $2,000 --- a bargain and a half eh mini

I've never had a million shares in anything before. I'm tempted just for the sheer novelty value.

nwood

06-09-2011, 03:54 PM

3595

How many ALF shares can I buy for one hundred trillion dollars

minimoke

06-09-2011, 04:00 PM

3595

How many ALF shares can I buy for one hundred trillion dollars
A quick back of a match box calc will give you about 10% of the company at ZIM$1 per share

percy

06-09-2011, 04:17 PM

I've never had a million shares in anything before. I'm tempted just for the sheer novelty value.

Don't do it.!!!!!

minimoke

06-09-2011, 04:23 PM

Don't do it.!!!!!
Oh I don't know . I reckon it could be good value for money. Remember a couple of years back punters were happy to throw $500 for 500 Tasman Capital shares. I reckon if I wait a week I could get a million ALF shares for a grand. Thats got to be good value!

bung5

06-09-2011, 04:28 PM

The question is which chump(s) has been buying these shares all the way down?!?!!

percy

07-09-2011, 06:18 PM

Oh I don't know . I reckon it could be good value for money. Remember a couple of years back punters were happy to throw $500 for 500 Tasman Capital shares. I reckon if I wait a week I could get a million ALF shares for a grand. Thats got to be good value!
If you would like to join "the mad punters not for profit group" I am willing to sell you 2mil DMNOA[au] for $2,000 NZ. They expire 6/5/2013.

minimoke

14-09-2011, 11:57 AM

If you would like to join "the mad punters not for profit group" I am willing to sell you 2mil DMNOA[au] for $2,000 NZ. They expire 6/5/2013. Thanks for the very tempting offer but there might be something a bit hotter on offer soon. All $0.002 bids dried up today so heading to $0.001. I'm thinking I could perhaps be a multi-million shareholder for less than a grand.

J R Ewing

14-09-2011, 12:44 PM

I wonder what happens after $0.001? Does NZX then move to offering one hundredth of a cent increments? Or is $0.001 the minimum bid you can make, so this becomes the absolute bottom below which the share can not trade (until they have a consolidation).

GTM 3442

14-09-2011, 06:01 PM

digger

14-09-2011, 08:23 PM

A consolidation would show how overvalued they are at $0.001, d'you think ?

Almost every consolidation i have seen ends up a act of desperation. Usually the shares continue to fall and within a very short time half again.
Some of you may know i was a dairy farmer and still am a cattle dealer.This year i will turn over about 150 cattle.Until very recently i used to trade through Allied farmers.Like the Morrinsville Allied auctioniars are great people to deal with,but about 4 months ago i laid down some conditions for further dealing as they are at the knife edge of going broke.The first was that at any one time they were not to owe me more than 5000 dollars and that the SP was not to fall below .6 of a cent.Hence for the last 3 months i have had to sell through Wrightson.
Now the agents tell me if everyone acted like me they would go broke for sure but risk is risk and i am here to look after me. in fact i feel some heavy selling farmers going through Allied are risking all and it is just musical chairs and the sh--t hits the fan when the music stops which could well be anytime soon.

Toulouse - Luzern

14-09-2011, 08:42 PM

Hi,
Good on you Digger.
Sound approach.

Toulouse - Luzern

14-09-2011, 08:48 PM

minimoke

15-09-2011, 09:10 AM

Hi MM,
If you fancy being a millionaire, then booking a trip to Bali is an option.
I have just come back and for $NZD848.44 today you can get 6,000,000 IDR (Indonesian rupiah) to spend in Bali.

Ref: http://www.oanda.com/currency/converter/
Hmm, another tempting proposition. I am however dissuaded on the basis that spending in Bali will only return me photographs and memories. Whereas a scrip certificate with a million ALF shares will last me forever. it will be something I can pass down from generation to generation as a reminder of how Moms and Pops used to invest in NZ.

I'm also conscious a Bali spend would also only help stimulate the Balinese econonmy. While some might suggest NZ is an economy heading that way I'm inclined to think my spend might be more worth while in NZ. The lawn bowls season is nearly upon us and I'd imagine there are a few ALF investors who could put my contribution towards a new hat. That they can't afford the car within which they could place their hat on the back ledge will be a reminder of their initial folly.

JR - you might be wondering what will happen if ALF goes to $0.001. Well the obvious thing is that you will see the value of ALF drop by 50% in one trade. That gives them a market cap of $2m. By this stage there won't be too many stocks around where a $0.001 increase in SP see's you double your money.

Newman

15-09-2011, 09:20 AM

JR - you might be wondering what will happen if ALF goes to $0.001. Well the obvious thing is that you will see the value of ALF drop by 50% in one trade. That gives them a market cap of $2m. By this stage there won't be too many stocks around where a $0.001 increase in SP see's you double your money.

The share price cannot go below 0.1 cent, that is the rule of NZX. To sell 50000 ALF shares at 0.1 cents would not cover the brokerage for one-off sellers.

minimoke

15-09-2011, 09:59 AM

The share price cannot go below 0.1 cent, that is the rule of NZX. To sell 50000 ALF shares at 0.1 cents would not cover the brokerage for one-off sellers.
Unless they are with Direct Brokerage. A one off trade for $29.90 nets the broker $60 and the ALF seller a couple of cups of Early Grey and Custard Squares. And thats how much an Hanover/ALF holders $10,000 is now worth.

minimoke

15-09-2011, 05:16 PM

The share price cannot go below 0.1 cent, that is the rule of NZX. To sell 50000 ALF shares at 0.1 cents would not cover the brokerage for one-off sellers.
Alternatively you can do like what a canny ALF investor did today. You could flick your 17,000 shares at $0.002 in an off market trade. You get to keep your $34 dollars and the brokers miss out.

Anyone remember when Mr Alloway said the ALF deal was the best chance Hanover investors had of getting 100 cents back in the dollar. Those $0.78 debentures would have been looking pretty good now! And to think they weren't too impressed with that initial $0.06 payment.

Lizard

30-09-2011, 07:20 AM

Crunch day... how many shares are they going to issue?

minimoke

30-09-2011, 08:31 AM

Crunch day... how many shares are they going to issue?
Rumour has it that ALF has leased Canterbury University's Blue Gene super computer to do the calculations in time. Cactus Kate did offer a spread sheet however Excel created a blue screen of death when she hit the"calc" button.

For those thst don't recall here's the calculation.

A = percentage of Allied Farmers Voting Rights that should be represented by the Allied Farmers Ordinary Shares existing on the day prior to the Completion Date being calculated as follows:

(B x Allied Farmers Issue Price) / ($396m - Shortfall + (B x Allied Farmers Issue Price)
Where

B = number of Allied Farmers Ordinary Shares existing on the day prior to the Completion Date
'Allied Farmers Issue Price" = issue price which is the volume weighted average price of Allied Farmers shares for price setting trades on NZSX over the 5 Business Days prior to the date of the meeting of Hanover Finance debenture holders to be held to approve the proposal (to be held on or about 15 December 2009)
"Shortfall" The Exchange Agreement provides that a "Shortfall" will exist if in respect of the period up to 30 June 2011 the total amount achieved from the realisation of any Finance Assets and the total value of any such assets still held by AFIL or anyon-transferee of such assets (in each case, determined on a consistent basis to the price allocated under the Exchange Agreement) is less than the NZ$396.2 million price attributed to those assets under the Exchange Agreement. This calculation will be made as part of the audit of Allied Farmers' financial results for the period ended 30 June 2011 and is expected to be announced at the time the audited financial statements are released.

C = A x (Assessed Value / Allied Farmers Issue Price) / (1 - A)
D = number of additional Allied Farmers Voting Rights that will result from the amendment of the rights attached to the Bonus Securities calculated as follows:

C – B

(b) Following the calculation, the rights attached to the Bonus Securities will be amended as follows:
(i) The Bonus Securities will be subdivided or consolidated In the following ratio
E = (C/B - 1) / Bonus Ratio and each Bonus Security will be consolidated or subdivided in the ratio (existing: resulting) of 1:E; and
(ij) The rights attached to the Bonus Securities will be amended so that they are identical to the rights attached to fully paid ordinary shares issued by Allied Farmers.

Pure lazyiness on my part has prevented me from doing anything more on what is a purely academic exercise. No matter how it is presented teh answer will be "ugly"

Lizard

30-09-2011, 08:40 AM

Xerof

30-09-2011, 10:32 AM

I've run this through my HP12C, and the answer is 42

so long and thanks for all the fish

Lizard

30-09-2011, 10:45 AM

I've run this through my HP12C, and the answer is 42

so long and thanks for all the fish

Time to upgrade to something that can handle ∞ :p

minimoke

30-09-2011, 11:52 AM

Minimoke, it is not the bonus shares I am so interested in - it is what they calculate for the nta-based adjustment to the number of shares issued to placement holders last year... either I have misunderstood the notes to the accounts or they will need to re-negotiate with placement holders.OK, I'm going to need some help her. Can we assume NTA is $0.0060.

So $0.0060 - $0.02 = -$0.014 OK - I've now come unstuck cos thats a negative number and I end up with holders giving back 160,714,285 shares. But they were only given 90,000,000 in the first place.

So lets assume $2,250,000 at an issue price of $0.006 then we end up with 375,000,000 shares less the 90m already issued. Gives us 285,000,000 new shares.

Or an NTA 3.3 times the theoretical $0.006. Lets say we had:
$0.021 - $0.020 = $0.001. That then gives us $2,250,000 at a price of $0,001 which is 2,250,000,000 shares less 90,000,000 or a total issue of 2,160,000,000 new shares.

Warning math, like spulling is nto a strong point!

Xerof

30-09-2011, 12:05 PM

This reminds me of the dropping of counterfeit deutschemarks over Germany in WWII - look out Hawera.............

Lizard

30-09-2011, 12:21 PM

OK, I'm going to need some help her. Can we assume NTA is $0.0060.

Where did you get your nta from? I got mine from FY11 balance sheet, group equity less intangibles... and it isn't a positive number.

minimoke

30-09-2011, 12:35 PM

Where did you get your nta from? I got mine from FY11 balance sheet, group equity less intangibles... and it isn't a positive number.
Just grabbed it off the fundamentals on Findata.co.nz.

You'de end up with around -$7,239,000 or is that -$0.0035 a share?

Lizard

30-09-2011, 12:56 PM

I read the adjustment to be that they get as many shares as it takes to make the nta add up to $2.25m, which is rather tricky when nta is negative. However, perhaps as you point out, some theorist might suggest that means they actually owe ALF shares. i.e. $2.25m/-.0032 = -702m. Add on the 90m they were issued and they had better start buying up shares to hand back... :t_up:

minimoke

30-09-2011, 03:58 PM

that means they actually owe ALF shares. i.e. $2.25m/-.0032 = -702m. Add on the 90m they were issued and they had better start buying up shares to hand back... :t_up:
I don't think they will need to buy back shares. As substantial shareholders they will probably just be asked to cancel their 702m holding. Here's a tip for current ALF holders - get in there and buy at $0.003. With 2,042m currently issued shared, less 702m shares significant holders will cancel leaves us with 1,340m shares. Current capitalisation is $6m or $0.003 a share - my cunning plan will see the $6m cap equate to $0.0045: a 50% increase in your investment!

Footnote: you get that investment advice for free and without input from Alloway or PWC. Rest assured taking this advice will result in the same outcome as previously experienced. Once you've made a killing on that punt I've got a cracker bit of land in Queenstown which is just crying out to be added to your portfolio!

Lizard

30-09-2011, 05:05 PM

minimoke

30-09-2011, 05:09 PM

Mini, you ramper... you posted that and someone took out 1m at 0.4cps... hope your tip was "Class Advice"! :p
Between you and me, I've been asked by Radio Live to host a Sunday morning investment show.

Lizard

30-09-2011, 05:50 PM

Between you and me, I've been asked by Radio Live to host a Sunday morning investment show.

Well that's good, because I know of a few Finance Companies that might want a bit of endorsement! :D

Looks like ALF is going to keep us in suspense until Monday. Actually, they said in their August update that the audited report was going to be available by the 28 September. Guess they are still trying to unfreeze the computer - or perhaps trying to string together the logic to claim they are owed 792m shares by the placement holders.:)

winner69

30-09-2011, 09:25 PM

Between you and me, I've been asked by Radio Live to host a Sunday morning investment show.

Great news mate --- following in the footsteps of gurus like Doug S E eh

minimoke

03-10-2011, 12:32 PM

Audited 30 June Annual report hasn't been received by Stock Exchange. Trading in securities will be suspended if not handed over by COB 7 October. We know it takes a while to massage accounts to give them a decent look and convince the Auditors to let them through.

minimoke

03-10-2011, 12:39 PM

Mini, you ramper... you posted that and someone took out 1m at 0.4cps... hope your tip was "Class Advice"! :p

(I suspect it was Winner trying to make a make a comeback in the competition this month.)
More devotees following the advice - another solid punt at $0.004 today.

(Winner knows how much can be made from following Uber Guru Dougs advice. If Winner isn't following this tip he risks not sharing the spoils eagerly anticipated by ALF holders.)

minimoke

03-10-2011, 02:18 PM

Crunch day... how many shares are they going to issue?
Well not sure how this works. In an update today they say " The audited 30 June 2011 financial statements included in the Annual Report are required to take into account a number of matters that have occurred since the release of the preliminary unaudited financial results on 29 August 2011. One of those matters, which is expected to have a positive impact on the group, was intended to be completed prior to finalisation of the financial statements.

The Board believes there is a good prospect of that matter being completed in the next few days. Because that event, if concluded, is expected to have a significant impact on the financial statements and the calculation of the rights attached to the Bonus Securities and the Price Adjustment Rights under the placement completed in August 2010 which are dependent on the audited results, the Board considers it prudent to delay completion and disclosure of the Annual Report for a short period."

So if an event occurs after year end, how can it be applied retrospectively. Are ALF like National - they think that if something doesn't go their way they'll just backdate things.

Lizard

03-10-2011, 02:33 PM

minimoke

03-10-2011, 03:17 PM

I would have guessed first-off that it might involve returning ANF to trading somehow and therefore putting it back in the accounts as a continuing operation. However, that wouldn't affect the rights attached to the bonus securities - that would require a positive move in the value of the Hanover assets. Difficult to see how that could be applied retrospectively though.
Given NTA, currently stnads around -$7.3m do we assume they have found at least this amount from somewhere. That then leads to a positive NTA and they can then do their share calcs based on that figure.

I can't figure the retrospective bit: either the event happened in that financial year or it didn't. I'm not sure how they could potentially miss a material transaction at the unaudited accounts stage.

Lizard

05-10-2011, 01:32 PM

Rob Alloway buying up shares at $1 "each" - that is $1 per parcel of around 172,500 and 162,500 shares - i.e. total acquisition price of $2 or about 0.00058cps (and that really is in cents per share, not dollars!). At least that is how I read it. Odd things afoot.

winner69

05-10-2011, 01:52 PM

Lizard

05-10-2011, 02:14 PM

minimoke

05-10-2011, 03:03 PM

... don't think belg has ALF in his picks ... my point of difference to him
You're not buying in the down trend then?

minimoke

05-10-2011, 03:05 PM

Mini, you ramper... you posted that and someone took out 1m at 0.4cps... hope your tip was "Class Advice"! :p

(I suspect it was Winner trying to make a make a comeback in the competition this month.)You'll note some are swimming in the glory of my advice - up at $0..6 today thats doubling your money in just a few days!

Lizard

06-10-2011, 01:03 PM

Well I've no idea how they calculated it, but they've managed to come up with a number of shares to issue for the placement holders - looks like they based it on about $0.0021 per share. So another 977m to the placement holders and 118m to the bonus issue holders... but then it probably doesn't matter anyway, as the ALF010's are going to convert to equity... all $12.6m of them. At 95% of the average of 20 business day VWAP's prior to 15 November...

You'd better start ramping that price, Mini. If you can keep that VWAP at .004m they should be able to get away with just handing half the company to the noteholders...

minimoke

06-10-2011, 01:23 PM

You'd better start ramping that price, Mini. If you can keep that VWAP at .004m they should be able to get away with just handing half the company to the noteholders...

Ok I'll try.

Brilliant news. ALF has now increased in size approx 50%. Its gone from approx 2,000m shares to over 3,000m shares. So you are getting many more shares for your money and that's good value.

ALF is also $2m better off - thats $2,000,000. The unaudited loss of $43m is now only $41m.

And a pat on the back to those decent Hotchin and Watson chaps. They have willingly forgone $5m to the benifit of ALF. Lets not hear any more about them being rogues! Just goes to show those original Hanover Investors were backed by men of integrity. As for ALF - they have learnt the error of their ways (by saying nasty things about Hanover) and that can only show ALF is a much stronger company because of it.

And take some assurance from the covenant breaches, While they continue, its only an extra 2% that is being paid to holders. But the Capital Notes are going to be converted to shares which measn the company is only going to get bigger.

Buying today at $0.005 will see like a bargain in time to come!

janner

06-10-2011, 01:39 PM

I will ring my broker immediately.. Yeah Right !!.. :-)

minimoke

06-10-2011, 02:42 PM

I will ring my broker immediately..
Before you do, I have a container load of RWC Canadian Car Flags I'd reluctantly onsell to you at wholesale price of $6.00each. We know Canada will go all the way but unfortunately being in Christchurch I can't make the most of this fantastic opportunity. You could make a killing. Put you money into this investment rather than ALF - you'll have more to show for it at the end of the day - guaranteed.

minimoke

06-10-2011, 03:08 PM

He has bought (or relieved the sellers of) Allied Capital shares for the $2 .... Allied Capital have some Allied Farmers shares - those not worth much methinks

You always get suspicious when these silly games start happening eh

I have hope - as does Alloway - that ALF will be 10 cents by Xmas ... just in time to win the stock picking compo ... don't think belg has ALF in his picks ... my point of difference to himAllied Capital held 5,442,963 ALF shares. So Alloway has bought $21,771 shares for $2???? ALternativlty has he bought these shares at $0.000000363 approx each.

Cannot figure this. According to the companies office, Giesbers and Macfie held 100% of Allied Capital Limited. Alloway has purchased 100% of Allied Capital. Apparently Allied Capital owns 5,442,963 of ALF.

Even 345,000 ALF shares for $2 is a value of $0.000005797 a share.

Disc: My abacus isn't good at counting to so many decimal places so I'm bound to be out by one or two.

Lizard

06-10-2011, 03:47 PM

Allied Capital held 5,442,963 ALF shares. So Alloway has bought $21,771 shares for $2???? ALternativlty has he bought these shares at $0.000000363 approx each.

Cannot figure this. According to the companies office, Giesbers and Macfie held 100% of Allied Capital Limited. Alloway has purchased 100% of Allied Capital. Apparently Allied Capital owns 5,442,963 of ALF.

Even 345,000 ALF shares for $2 is a value of $0.000005797 a share.

Disc: My abacus isn't good at counting to so many decimal places so I'm bound to be out by one or two.

Well, I guess it is always possible that Allied Capital have other liabilities that are offsetting the value of the ALF shares?

minimoke

06-10-2011, 04:31 PM

According to the companies office, Giesbers and Macfie held 100% of Allied Capital Limited.
No they didn't. On digging deeper its' Alloway who has been the majority holder. He's just gone and bought them out. So the man who saw the value in Hanopver sees the value in ALF. Go ALF!

winner69

02-11-2011, 12:15 PM

Consolidation coming up .... keep it quiet ... esp from Lizard so she won't adjust things in her NZX compo

minimoke

02-11-2011, 04:18 PM

Consolidation coming up .... keep it quiet ... esp from Lizard so she won't adjust things in her NZX compoThe Hanover / ALF holders won't be happy. They'll see this as shrinkage of thier initial investment. The more shares the better is what they will be after.

GTM 3442

02-11-2011, 08:18 PM

How long before the consolidated shares get back to 3cps ?

winner69

03-11-2011, 01:29 PM

ALF010 into shares .... is that another trillion shares to be issued?

Lizard

03-11-2011, 02:07 PM

ALF010 into shares .... is that another trillion shares to be issued?

Depends on average of 20 days VWAP, although that's half in the bag at this point... and the price used is 95% of that value - calculate the number by dividing into $12.6m

Given another 1095m shares to be issued to bonus and PAR rights holders, the market cap is effectively around $6m at 0.2cps...so the noteholders probably going to end up with a little under two-thirds of ALF. Glad the Hanover investors don't mind sharing around the $110m of net assets they are now recognised as having brought to the table...

Lizard

06-11-2011, 09:23 AM

One thing I think needs to be asked here is how ALF can issue the 977m+ shares to PAR holders. They eventually end up with nearly as much of the company as Hanover investors, yet put in only $2.3m c.f. Hanover investors nearly $110m. Shareholders never got a vote on this and now won't - which appears a bit outrageous.

Earlier, this was going to be included in a shareholder vote at the upcoming meeting, due to the 20% limit on new issues, but now it seems they have been able to bypass this, as they can include the shares from the ALF010 conversion.

It is probably splitting hairs, given this farcical situation can only occur because the company is close to worthless. But this process does seem to have circumvented listing rules by effectively issuing shares under a placement that now equate to almost 50% of the shares that were on issue at the time of placement, yet shareholders don't get the chance to vote on this.

Oh, and it would have to be presumed that the allocation of these unissued shares is contributing to the effective share price (theoretically one-third lower than it would be without them) and therefore the VWAP at which the ALF010's will end up converting. A "double whammy" for existing holders in the dilution.

winner69

07-11-2011, 10:28 AM

ALF issue of shares and dilution of some holdings sems to parallel the Zimbabwe inflation rate

Lizard

09-11-2011, 08:56 AM

Looks like ACC took might have taken the major part of that placement last year, as appear to have been allocated quite a few shares under the PAR rights.

minimoke

09-11-2011, 09:25 AM

Looks like ACC took might have taken the major part of that placement last year, as appear to have been allocated quite a few shares under the PAR rights.
I think we will find ACC is propping up quite a number of companies. (inc Syft, Dominion Finance, Just Water, Energy Mad, Ecoya, Whoosh, Sealegs, NZO, Pike, Abano and Methven)

winner69

16-11-2011, 01:36 PM

Newman

16-11-2011, 02:58 PM

After consolidation at 100:1, ALF shares were traded at 6 cents each. This is equivalent to 0.006 cents before consolidation.

bung5

16-11-2011, 03:07 PM

After consolidation at 100:1, ALF shares were traded at 6 cents each. This is equivalent to 0.006 cents before consolidation.

so ALF has a market cap for 1.5 million not 150 million ?

digger

16-11-2011, 03:31 PM

After consolidation at 100:1, ALF shares were traded at 6 cents each. This is equivalent to 0.006 cents before consolidation.

Given it was 100 to 1 then the 6 cents today relates to 0.06 not 0.006 as that would be 1000 to one.
So just before considalation it was on average .3 of a cent it has now lost 4/5 of its value since considalation. Is that correct or have i got it wrong somewhere.
The idea of considalation from my experience is the allow further lose of value. Below .1 of a cent the company can no longer trade so consolidation is necessary to continue DOWN the slippery path.
Are these cals as others see it??

Xerof

16-11-2011, 03:42 PM

Yes digger, nothing wrong with your logic.

I'm wondering why the price would collapse today in particular - surely nobody sold at these 'higher' prices without knowing there was a consolidation, but to me that seems to be what has happened, or its a couple of the bond holders getting their cash out

with 58k of sales today, the MC has collapsed by 70% of what it was yesterday.....

Lizard

16-11-2011, 04:11 PM

Liz - I haven't been able to keep up ... so how nany shares did they end up with before the consolidation .... billions or trillions or zillions

All I know that ALF shareprice is now 5 cents ... much higher than the beginning of the year so should save my bacon in the NZX comp

How is it you always manage to fit more words between the lines than you do in them?

So excuse me if I read incorrectly, but what you are saying is.... "it would be fun to get away with this in the comp without Liz noticing, but at the same time I know she's not completely blind so I'll just opt for a laugh at the possibility" or perhaps "ALF are going to confuse a few former Hanover debenture holders with this - and may even be getting some comfort out of doing so" or (like everyone else here), "why the heck did the price go down so much on consolidation?"...

To the latter, I think you would have to go with Xerof's hypothesis that the bond holders found some liquidity to sell into and were willing to take a haircut (given many of them were already up for one on the bonds, so had already priced in the loss - or had bought below face value) and therefore taking the sp with them as they exit.

winner69

16-11-2011, 04:49 PM

The drop today was cause of the 1.2 billion new shares (pre consolidation) issued today from the PAR thing and Capital Notes (about 70% of the total issued capital)

And then the 100.1 consolidation

Liz all those billions have me confused ...

Lizard

16-11-2011, 05:04 PM

The drop today was cause of the 1.2 billion new shares (pre consolidation) issued today from the PAR

... only in the sense that it gave them some liquidity and the chance to sell out. Normally any significant holder of shares would have done the calcs on market cap adjustment weeks or months ago.

Morpheus

16-11-2011, 05:11 PM

The NZX website is still showing ALF has 2,550,971,709 on issue.
But my reading of it is the noteholders were issued just under 6 billion shares at 0.2c just prior to consolidation. The PAR holders got 977 million and the bonus share holders got 118.09 million new shares. Add that to the 2 billion odd already on issue and you had about 9 billion shares. Consolidate at 100 to 1 and the company now has 90.79 million shares on issue.

Lizard

16-11-2011, 07:03 PM

Yes, the announcement (https://www.nzx.com/files/attachments/149298.pdf) has it correct at 90,792,438 I think. NZX has had a few problems of late with some of their info of late...

neopoleII

16-11-2011, 08:02 PM

with all these mind boggling numbers...... why are they still trying to make a go of it.
is it because the directors are still getting paid?
........because no one else is getting anything.
you would think that the nzx or some such body would just end it.

unless....... they have a master plan or can sell or develop the "cr.p" they got from hanover.
and in the meantime....... the world isnt looking so hot, so these property assets arent going anywhere but down.......... imho.

and what are the shareholders doing?
or the government agencies protecting shareholders?
the only real asset left is the trustfunds that some judge has temporally siezed which contains the mansions from one of the directors.
paid for via .............
or was it the party related loans were worth more than alf?
or the "other" party director who was..... is.... isnt ..... could of been ..... someone who got millions of divies but was never a director............
but obvious all legal, safe and honest in cowboy land NZ.

and this is just one story of the many failures in this sector that has destroyed billions or wealth for citizens, and still no one has "really" been held to account.

and yet we have government and commentators telling us to invest in NZ.

ummmmmm........ which part?
and is it safe to do so?
will citizens be protected from vampires?
does a wet bus ticket really make vamps play fair?

im sure our next generation is really going to invest in kiwiland bigtime......... NOT

neopoleII

16-11-2011, 08:11 PM

forgot my disclosure....
never invested in any finance company........ thats for fools and old folks.
i invested in NZO.... a premier oil and gas explorer that is at the forefront of NZ hydrocarbon exploration with a big holding in the state of the art kupe gas field and custom made processing facility.
......... drats....... got let down there....... just like grandma with hanover
i see TR is holed up in a spiffy mansion.

Lizard

16-11-2011, 09:12 PM

with all these mind boggling numbers...... why are they still trying to make a go of it.

Because the major creditor is now ANF and then the ANF major creditor is the Crown? And the ANF major creditor needs the maximum amount extracted out of ANF that it can get, and putting ALF into receivership would not help?

Anyway, now those note-holders are clearly equity and not debt, so that is an instant improvement to the balance sheet, eh? Heck, might even be able to find some more investors willing to throw in some more equity and improve the ANF/Crown position a bit...

Balance

08-10-2012, 09:37 AM

Qualified auditors' report re going concern - ALF on its last legs?

Loan application turned down and now company trying to get a new one.

Hoop

08-10-2012, 10:24 AM

Qualified auditors' report re going concern - ALF on its last legs?
Loan application turned down and now company trying to get a new one.

Allied Farmers' auditor refuses to give opinion on accounts (http://www.sharechat.co.nz/article/79a61235/allied-farmers-auditor-refuses-to-give-opinion-on-accounts.html)

Balance

08-10-2012, 07:25 PM

Allied Farmers' auditor refuses to give opinion on accounts (http://www.sharechat.co.nz/article/79a61235/allied-farmers-auditor-refuses-to-give-opinion-on-accounts.html)

Tick, tick, tick.

ALF
08/10/2012 15:16
GENERAL

REL: 1516 HRS Allied Farmers Limited

GENERAL: ALF: ALF has received a request for payment of $500,000 loan due

Allied Farmers Ltd (ALF) has received a request for payment of a $500,000
loan due.

This loan had been scheduled to be repaid from the proceeds of the underlying
asset due in November 2012.

Allied has requested an extension of time from the lender to coincide with
the realization of the underlying asset. This seems a sensible solution for
both the lender and borrower.

However in the event an extension is not granted that would result in an
enforceable event of default under ALF's secured loan facility.

Chairman of Directors

digger

12-10-2012, 07:21 PM

Tick, tick, tick.

ALF
08/10/2012 15:16
GENERAL

REL: 1516 HRS Allied Farmers Limited

GENERAL: ALF: ALF has received a request for payment of $500,000 loan due

Allied Farmers Ltd (ALF) has received a request for payment of a $500,000
loan due.

This loan had been scheduled to be repaid from the proceeds of the underlying
asset due in November 2012.

Allied has requested an extension of time from the lender to coincide with
the realization of the underlying asset. This seems a sensible solution for
both the lender and borrower.

However in the event an extension is not granted that would result in an
enforceable event of default under ALF's secured loan facility.

Chairman of Directors

Hi Balance.

Can you fill in a few details for me. I trade cattle mostly at Morrinsville saleyard. 1.5 years ago ALF was in the Sh-t for sure and i stopped trading through them and went to Wrightson. Remember if a firm goes bellyup just after you sold cattle throught them you may or may not get paid.Not an encouraging thing to do. About a year ago ALF spun off a firm called NZ Farmers Livestock of which they own about 70 to 80 % off if my memory serves me correctly.Naturally this firm NZFL wanted me back trading with them as they claimed they were seperate from the whoes of ALF. I did not think so and have stayed with Wrightson.
Now my question is what do you think happens with this holding ALF has in NZFL after they default next week??

digger

13-10-2012, 07:22 PM

Balance

15-10-2012, 09:45 AM

Hi Snapiti
My quess is a cheap takeup for RD1. If it comes up at a forced sale I can not see the agents having enought Knowledge or resources to pick it up. Maybe they will try to flog it off to the existing clients,
Watch this space is about all i can say to sum up.

Irrespective of whether NZFL goes to RD1, PGW or goes down with ALF (if that happens), the prudent rule applies - which is not to deal with a credit risk as the extra 2% or so they may give is not worth the whole sum put at risk. The finance companies showed that glaringly - the extra 2% pa ended up costing the investors 60% to 100%.

Vaygor1

06-01-2013, 11:26 PM

Irrespective of whether NZFL goes to RD1, PGW or goes down with ALF (if that happens), the prudent rule applies - which is not to deal with a credit risk as the extra 2% or so they may give is not worth the whole sum put at risk. The finance companies showed that glaringly - the extra 2% pa ended up costing the investors 60% to 100%.

Qualified auditors' report re going concern - ALF on its last legs?

Loan application turned down and now company trying to get a new one.

I do not think ALF will go broke.

Refer latest announcements just before Christmas 2012.
https://www.nzx.com/companies/ALF/announcements/231570 and
https://www.nzx.com/companies/ALF/announcements/231572

I firmly believe they should be back in the positive equity territory by now. ie Out of the red where they can focus on growth instead of survival.
With over 90 years of history in NZ there is still a great deal of rural allegiance there to continue supporting them in their now non-merchandise business (bought mostly by RD1).

The 2 risks shareholders faced prior to the above announcements were 1) Further write-down of assets and 2) Reliance on CAML accepting ALF's funding proposal.
Both of these risks are now gone by the looks.

I have bought a shed-load of these over the last while and held zero prior to the Hanover disaster, which should no longer have any major negative impact on their future business so long as they stick to their knitting.

Views and comments welcome.

Best regards,
Vaygor1.

blobbles

07-01-2013, 02:23 PM

I read one sentence in their annual report which I felt was rather damning:

"The shareholder-approved Executive Share Option Scheme was introduced in 2007, allocating 1,300,000 Allied Farmers Limited share options to eligible senior executives. All share options had lapsed at balance date"

If senior management doesn't want to invest in their own company, why should I?

ALF unfortunately still has quite a few fleas and it will take some sorting out before I think of investing again. Essentially they are still in a state of selling off assets to pay their bills. Not something that makes me want to buy them!

Vaygor1

08-01-2013, 01:31 AM

Thanks for the comment blobbles.
Apart from yours, the silence has been deafening.

Given ALF's complete and utter demise since 2006/2007 I for one am very pleased they have let the Executive Share Option expire.
With bonus issues, rights issues, executive management share issues, shares for bonds issues etc etc etc ALF have issued approximately 1,500,000,000,000,000,000,000,000 shares in the last few years... well, not quite that many but I wasn't involved back then and the number of zeros hurt my eyes when I read back. The quantities involved were almost of biblical proportions and almost an embarrassment to the NZX and NZ in general at the time.

Actually, over the last few days I have read every single post in this ALF thread, and nearly had an infarction laughing so hard at the wonderful comments posted here during all these share issues and the conjecture over how the formulas would work. I wish minimoke still contributed to this forum 'cause he/she was brilliant. (I looked up his/her profile and he/she hasn't logged in for quite a long time).

I am going to drip feed info to this ALF thread over the next while but 1st the obvious points which are:

ALF is no longer a finance company.
All the Hangover-Handover-Hanover assets are gone.
ALF appear to have a tidy arrangement now with CAML and I think there is much more to this arrangement than meets the eye.
Shoeshine man Rob Alloway and the other hopeless dreamers/idiots out there who were in charge have gone. NZX top 50...what a joke.
ALF are almost certainly back in +ve equity territory and if not, soon will be.
They have over a century of history in their traditional sector and that is an asset that takes 100 years to achieve and, unless you go completely broke, much more than 5 to destroy.
They have downsized tremendously and rationalised. In fact I am surprised they haven't de-listed as this would save a buck too.
Apart from merchandise (which they sold to survive) they are now focussed on their traditional sector(s) in my view.
They can focus on growing now instead of putting out fires.

God forbid if they ever decide to buy a sawmill again let alone a bloody finance company.... I mean buy a sawmill????... Good God, I mean if that was a 'natural next step' they may as well have got into making toasters, or become a nationwide distributor of door-knobs, or something else else even dumber like buying a finance company. To be honest, even the toasters bit wouldn't have surprised me... what a ginormous bloody disaster... and what a mess.

Anyway. It's over (maybe not over for Hotchin and Watson yet though). Now, I'm in. Not much to lose and loads to gain. I will happily eat my words if I have to. Time will tell (as it always does).

Watch this space.

Vaygor1.

blobbles

08-01-2013, 02:32 AM

All well and good,what us investors are looking for though is that they can start making a profit or at least have a decent chance of doing so. But to me that point looks about 2-3 years off,maybe, if they don't do anything stupid and if they can keep getting loans to support them. While the people doing the stupid things may be gone, the onus of proof of running their business well is on them after the complete idiocy of the past 5 years. At the moment 1 of their business units is making a profit while the others are losing a lot of cash. Hence their lacklustre SP.

Vaygor1

12-01-2013, 11:00 AM

Thanks again Blobbles... obviously ALF still way under the Radar in this forum. I will put some numbers down in the next week or so regarding my thoughts on Return on Investment into ALF.

In the meantime, take a look at this interview with Adam Feely on 4-Oct-2012, not long before he left his role as CEO of the Serious Fraud Office. Hanover is discussed.

http://tvnz.co.nz/breakfast-news/financial-crime-endemic-in-all-parts-nz-video-5114890

So on the assumption that Watson and Hotchin get their comeupance in the not-too-distant future, and assuming a fair amount of compensation is recovered from the (currently?) frozen assets, then who gets the money?

In my view, it's the debenture holders that lost out at the time... but what would the cut-off date be for determining who they are/were? And how would you allocate it out?

ALF inherited all the debentures with the debt-for-equity swap way back when.

Now CMAL is involved and when you read the press release about them buying the remainder of the Hanover assets from ALF https://www.nzx.com/companies/ALF/announcements/231570 ...then what's the deal now?

What intrigues me is the statement in the above press release:
"ALF will benefit from a new Funding Facility that CAML has agreed to provide contemporaneously with the purchase of the Transferred Assets, and CAML has signaled that it will consider further, more significant, funding support at the time other assets are sold."

If CAML have bought the Hanover assets, then I have trouble seeing what the connection is between the subsequent sale of those assets by CMAL and the impact that may have on CAML's future funding support for ALF.

All views welcome.

Vaygor1

13-01-2013, 08:41 PM

Just reviewing my last post in this forum. Looking at the NZX announcement wording
"ALF will benefit from a new Funding Facility that CAML has agreed to provide contemporaneously with the purchase of the Transferred Assets, and CAML has signaled that it will consider further, more significant, funding support at the time other assets are sold."
By 'other assets', ALF is probably referring to their assets other than those acquired through Hanover.

But the question still begs on who gets Watson's and/or Hotchin's liquidated assets assuming they are seized.

That aside, what's ALF's position now? And how many assets are there left to sell?

Using the figures and other information in the Presentation to Shareholders
https://www.nzx.com/companies/ALF/announcements/230270
and (primarily) Section 5 of the nzx release detailing the CMAL transaction.
https://www.nzx.com/companies/ALF/announcements/231572
and ALF's latest audited financial report, I get the following position as at 22-Dec-2012:

Assets
($000,000)

Liabilities & Equity
($000,000)

Receivables
5.8

Property Loans
3.6

Merchandise
0

Allied Nationwide
5.6

Loans & Advances
4.9

Other Incl Creditors
6.5

Properties
0

Equity & Capital Notes
0

Other Assets
5

Total
15.7

Total
15.7

There is a bit of guesswork here as to the likely shift in equity since their last Annual Report. This shift would be due to their ongoing business-as-usual, realisation of the full value of their NZ Livestock subsidiary, and what increase (if any) there may have been in the value of their rural assets. None of these are reflected in the table above.

Also, I have had to take a stab at which accounting ledgers the CAML (and other) transactions apply to.

So in summary:

Assuming my figures above are right (and I have been wrong before), then all properties have been sold.
They have a NZ$5.6M hangover from the Hanover rigmarole, not a big deal in my view compared to the crap they were in before.
Not sure they have to sell any more assets at all. Their assets appear to now consist of cash, cash equivalents, property [sales yards, offices?], plant and equipment.

ALF should be able to operate as it did in the past with 3 notable exceptions:
1) Their merchandising division is gone.
2) The $5.6M debt.
3) They need to get more of their loyal (and not so loyal) customers back.

As before comments & feedback welcome.

More to come soon...

Vaygor1

28-01-2013, 06:52 AM

Is this a crazy question?

The difficulty in researching ALF is because over the last few years the real story on market cap, earnings ability, dividends, PE ratios etc etc has been totally warped by (a) their predicament and resulting loss reporting and (b) the concurrent massive amount of share issues/consolidations that took place over the period.

I have looked at it from various angles and have had trouble coming up with any numbers I can have any confidence in, so I decided to analyse ALF all the way from 2001 till the first signs they were falling off the rails (by buying sawmills etc) and finally got some pretty consistent results.

I will spare the detail for now and don't want to go too far into any assumptions made in arriving at the following (you can read my previous posts for some of that)...

Firstly, a million shares in ALF right now equates to 1.1% of the company.
To buy 1.1% of ALF over the last year or so would have cost an investor between NZ$20,000 to NZ$30,000.
In the years leading up to ALF's train wreck, the same 1.1% would have cost well in excess of NZ$20 million to buy.
In other words the market currently values ALF at around 1/1000 of what it used to.

Some things have changed now for ALF since their crash, some of which makes their future fundamentals and ability to earn more uncertain. But if ALF survives (and I most certainly think they will) then the chance exists for them to rise like the phoenix from the ashes.

What if, after all the dust has finally settled, they have only 1/10 of their historical earning capacity? That would make 1.1% of ALF worth NZ$2 million. Even if it takes them 13 years to get there, that would still represent a capital gain of 40% per annum compounding from a purchase price of NZ$25k. Dividends would be the cherry on top.

Using historical data and taking a pessimistic approach I broadly calculate that ALF's share price should be 11 cents for every $1million in equity it has.

I think there is a real possibility that ALF will have NZ$1M in equity by the end of this financial year. They might even have it now.

If ALF eventually get say $10M back from Watson/Hotchins if that is possible, then there's a nice bonus.

I would enjoy some devils advocate / independent calcs / different views etc feedback from those who read this.

After my previous posts on ALF, I'm not expecting much though.

Vaygor1.

minimoke

31-01-2013, 05:49 PM

I wish minimoke still contributed to this forum 'cause he/she was brilliant. (I looked up his/her profile and he/she hasn't logged in for quite a long time).

With earthquakes and all I've had other things on my mind. The shame of it all is that as I pop back not much seems to have changed. We still have the spruikers and dreamers and those not prepared to do some elementary analysis. I’d just remind people if you chase a dog with fleas you’re bound to get bit – its just the size of the bite that’s yet to be determined.

Snoopy

01-02-2013, 05:54 PM

Some things have changed now for ALF since their crash, some of which makes their future fundamentals and ability to earn more uncertain. But if ALF survives (and I most certainly think they will) then the chance exists for them to rise like the phoenix from the ashes.

What if, after all the dust has finally settled, they have only 1/10 of their historical earning capacity? That would make 1.1% of ALF worth NZ$2 million. Even if it takes them 13 years to get there, that would still represent a capital gain of 40% per annum compounding from a purchase price of NZ$25k. Dividends would be the cherry on top.

Using historical data and taking a pessimistic approach I broadly calculate that ALF's share price should be 11 cents for every $1million in equity it has.

I think there is a real possibility that ALF will have NZ$1M in equity by the end of this financial year. They might even have it now.

If ALF eventually get say $10M back from Watson/Hotchins if that is possible, then there's a nice bonus.

I would enjoy some devils advocate / independent calcs / different views etc feedback from those who read this.

Vaygor1, I have never held ALF but I write this as a long time PGW shareholder. ALF's sole remaining business is the Livestock trading arm - correct?

PGW are predicting a big drop in EBITDA from their Livestock division in FY2013. Not because they fear losing business to Allied Farmers. But because the price of stock units (sheep and cows) is expected to be much lower this financial year. One farmer shareholder who posts on this forum spoke of pulling his business from ALF in favour of PGW because of the fear of not getting paid at all in ALF went under.

I think ALF has an absolute mountain to climb to gain any creditability with rural NZ.

Your statement "Some things have changed now for ALF since their crash." is IMO the understatement of the year. Your guess that Allied Farmers might have 1/10 of their previous earning capacity is based on what? Personally I wouldn't base that on historical data, because the company is now so different history really is bunk in this case.

The stock and station business is I believe built on trust and personal relationships. If a few of those trusted employees decided to go it alone then I would say Allied Farmers is finished for good. I would estimate the chance of losing everything you put into this business is greater than 50%. And I can't see how the 50% 'success possibility' could deliver anything like the returns to mitigate the 50% bankruptcy risk.

SNOOPY

Vaygor1

03-02-2013, 06:52 AM

Vaygor1, I have never held ALF but I write this as a long time PGW shareholder. ALF's sole remaining business is the Livestock trading arm - correct?

PGW are predicting a big drop in EBITDA from their Livestock division in FY2013. Not because they fear losing business to Allied Farmers. But because the price of stock units (sheep and cows) is expected to be much lower this financial year. One farmer shareholder who posts on this forum spoke of pulling his business from ALF in favour of PGW because of the fear of not getting paid at all in ALF went under.

I think ALF has an absolute mountain to climb to gain any creditability with rural NZ.

Your statement "Some things have changed now for ALF since their crash." is IMO the understatement of the year. Your guess that Allied Farmers might have 1/10 of their previous earning capacity is based on what? Personally I wouldn't base that on historical data, because the company is now so different history really is bunk in this case.

The stock and station business is I believe built on trust and personal relationships. If a few of those trusted employees decided to go it alone then I would say Allied Farmers is finished for good. I would estimate the chance of losing everything you put into this business is greater than 50%. And I can't see how the 50% 'success possibility' could deliver anything like the returns to mitigate the 50% bankruptcy risk.

SNOOPY

Hi Snoopy.

Thanks for your comments. I appreciate the feedback.

Allied Farmers have 2 business units now.
1) Their Livestock Division. Through MyLiveStock.
2) Their Real Estate Division. Through FirstNational Real Estate.

I too am aware of the comments and decisions made by ALFs shareholders/customers in this thread. I am very interested in their viewpoints on whether or not they would utilise Allied Farmers' services again if they thought (or knew) that ALF would not go broke while their buying/selling of livestock was in the 1 or 2 day transition phase, which is the only perceived risk that customers were exposed to.

This perceived risk is now almost non-existent due to CMAL's buying the remainder of the Hanover assets and the funding arrangements they have put in place with ALF. Even before this occurred, plenty of farmers have been more than happy to deal through ALF to buy/sell livestock and feed, take out insurance, and use as agents to buy/sell farm real estate. You can visit www.mylivestock.co.nz (http://www.mylivestock.co.nz) and see for yourself.

ALF never lost its credibility from a traditional customers viewpoint. The way it has conducted business over the last 120 years and is conducting business with its farmers now holds a reputation that remains intact. It is the Board that lost its credibility from a shareholders viewpoint because it got into businesses (like sawmilling and financing) that it knew nothing about.

Choosing 1/10th of their earning capacity is a hypothetical, but a very conservative one. Giving them 13 years to get there is more than feasible. 13 years is a long time.

I have performed a detailed analysis between ALF as it was reported in YE 30 June 2005 (1 month after it bought the sawmill disaster) and now. Based upon a lot of measures I should realistically have chosen 1/5th the earning capacity. 1/10th is pessimistic. i.e. Turnover now is 1/4th of 2005, Employed livestock agents (excluding independent contractors) is now a 1/3 of what it was.

With its merchandising division now gone and Hanover now essentially concluded, choosing 1/10th suggests that merchandising contributed 90% of it's historical earnings. It never got anywhere near that.

Apart from not merchandising, I would like to know in what way ALF's business is any different now from what it was in 2005. I would be more than happy to be enlightened.

At ALF's AGM on 27th November 2012 the Livestock division was looking very profitable compared to annual report YE 30 June 2012.

ALF's 6-month report to 31-Dec-2012 will be out in approx 1 month from today. It will make very interesting reading. I am craving for data.

Vaygor1.

stoploss

03-02-2013, 08:34 AM

Snoopy

03-02-2013, 01:13 PM

Allied Farmers have 2 business units now.
1) Their Livestock Division. Through MyLiveStock.
2) Their Real Estate Division. Through FirstNational Real Estate.

I too am aware of the comments and decisions made by ALFs shareholders/customers in this thread. I am very interested in their viewpoints on whether or not they would utilise Allied Farmers' services again if they thought (or knew) that ALF would not go broke while their buying/selling of livestock was in the 1 or 2 day transition phase, which is the only perceived risk that customers were exposed to.

This perceived risk is now almost non-existent due to CMAL's buying the remainder of the Hanover assets and the funding arrangements they have put in place with ALF. Even before this occurred, plenty of farmers have been more than happy to deal through ALF to buy/sell livestock and feed, take out insurance, and use as agents to buy/sell farm real estate. You can visit www.mylivestock.co.nz (http://www.mylivestock.co.nz) and see for yourself.

ALF never lost its credibility from a traditional customers viewpoint. The way it has conducted business over the last 120 years and is conducting business with its farmers now holds a reputation that remains intact. It is the Board that lost its credibility from a shareholders viewpoint because it got into businesses (like sawmilling and financing) that it knew nothing about.

Thanks for your comeback Vaygor.

I notice that nowhere on the www.mylivestock.co.nz website is any mention of it being owned by 'Allied farmers'. Instead the website says it is operated by NZ Farmers Ltd, an NZX listed company. Is this some attempt to try and unstick some of the Allied Farmers mud? It is only in the small print in the terms and conditions that 'Allied Farmers Rural Limited' are listed as the operators of the website.

SNOOPY

Snoopy

03-02-2013, 01:46 PM

Apart from not merchandising, I would like to know in what way ALF's business is any different now from what it was in 2005. I would be more than happy to be enlightened.

At ALF's AGM on 27th November 2012 the Livestock division was looking very profitable compared to annual report YE 30 June 2012.

ALF's 6-month report to 31-Dec-2012 will be out in approx 1 month from today. It will make very interesting reading. I am craving for data.

Vaygor1.

Vaygor, I was a PGW (or WRI as it was then) shareholder in 2005, the same time period you are assessing for ALF. That was the year that Rural Portfolio Investments took a controlling stake in WRI. Back in those days WRI was not as it is now (they had not yet merged with Pyne Gould Guinness and were in the throws of swallowing Willaims and Kettle). However the Grant Samuel compiled, Wrightson commissioned takeover report of the time does have some interesting comments on the outlook for trading livestock in FY2005. The report is dated September 2004 and I quote from page 9.

"Wrightson is New Zealand's largest and only nationwide livestock business serving the needs of farmers, meat processors and others in the livestock industry. The livestock operations include a core sale agency business, a live export operation, Wrightson Velvet and Integrated Livestock management. The business is primarily based on a sales margin/commission model, and accordingly when sales volumes or sales prices reduce income to Wrightson is also reduced. Given the heavy reliance on the agency business, profitability of the livestock division is impacted by the changing values and volumes of livestock being sold. Livestock prices peaked in 2002 and since then have progressively declined (Snoopy note: PGW EBIT for livestock subsequently rebounded in FY2005, but I don't know if this was a 'market effect' or a 'merger effect'). Accordingly the EBIT of Wrightson Livestock has reduced from $11.9m in 2002 to $4.2m in 2004. Livestock has a high fixed cost structure which further exacerbates the the variability in earnings."

"A relatively new initiative is for the Livestock business to procure specified live weight sheep for processors. Wrightson enters into agreements with farmers for the supply of product to very specific parameters through the season (Snoopys note: this sounds like a forerunner to the more recent Silver Fern farms supply agreement that went disasterously wrong for PGW - resulting in a multi million dollar contract write down- when they realized that would not be able to get the volume of stock they signed up to purchase for Silver Fern farms). As processors become more demanding in their requirements, this method of livestock procurement is expected to become more common. This method provides Wrightson with a more certain income stream (Snoopy adds: except when the shortage of supply of stock means an agreement like this causes a major default, with multi million dollar writedown implications)."

I realise that none of the above directly relates to ALF, but I do believe the comments are general enough to point to the same kind of market pressures that ALF woudl have been facing at the time, and indeed faces now.

SNOOPY

Snoopy

03-02-2013, 02:10 PM

Choosing 1/10th of their earning capacity is a hypothetical, but a very conservative one. Giving them 13 years to get there is more than feasible. 13 years is a long time.

I have performed a detailed analysis between ALF as it was reported in YE 30 June 2005 (1 month after it bought the sawmill disaster) and now. Based upon a lot of measures I should realistically have chosen 1/5th the earning capacity. 1/10th is pessimistic. i.e. Turnover now is 1/4th of 2005, Employed livestock agents (excluding independent contractors) is now a 1/3 of what it was.

With its merchandising division now gone and Hanover now essentially concluded, choosing 1/10th suggests that merchandising contributed 90% of it's historical earnings. It never got anywhere near that.

Apart from not merchandising, I would like to know in what way ALF's business is any different now from what it was in 2005. I would be more than happy to be enlightened.

Didn't you just answer your own question above Vaygor? Employed Livestock agents are only 1/3 of what they were once (your figure). So in order to stand still in terms of dollars generated each remaining employee is going to have to generate three times the business they did in 2005, to get commission levels back up to 2005 levels. This should be easy to achieve. Instead of working 8 hours per day the emplyees could work 24 hours per day ;-P.

SNOOPY

Vaygor1

03-02-2013, 02:45 PM

" I would like to know in what way ALF's business is any different now from what it was in 2005. I would be more than happy to be enlightened."

They issued millions of shares , so I am not sure if your numbers stack up .You talk of 1/10 of the earnings but before they has the 10:1 reverse they literally issued millions and millions of shares.

Hi Stoploss.

Regarding massive share issues and the 100:1 consolidations (not 10:1), I have taken all that into account in my analysis.

Company earnings in terms of straight dollars/annum (as opposed to earnings measured in $/share) is unaffected by the number of shares issued. If someone owned 1% of ALF before and they own 1% of ALF now the number of shares on issue falls off.
Buying 1% in 2005 would have cost you over NZ$20MIllion. Buying 1% in 2012 would have cost you NZ$25k.
Their revenue is now only 1/4 as much as it was back then but that is only 1 small measure. It is equity and profit that counts and these numbers are a bit vague at the moment. Roll on their 1/2 year report in 30 days from now.

Vaygor1

03-02-2013, 03:03 PM

Thanks for your comeback Vaygor.

I notice that nowhere on the www.mylivestock.co.nz (http://www.mylivestock.co.nz) website is any mention of it being owned by 'Allied farmers'. Instead the website says it is operated by NZ Farmers Ltd, an NZX listed company. Is this some attempt to try and unstick some of the Allied Farmers mud? It is only in the small print in the terms and conditions that 'Allied Farmers Rural Limited' are listed as the operators of the website.

SNOOPY

Hi Snoopy.
ALF have made no secret of this.
The reason for the different entity (NZFL) is to ensure that its affairs are immune to whatever was happening in ALF so Joe Farmer can trade through them in confidence.
Also, NZFL (at YE 30 June 2012) was 30% owned by Livestock Agents and Staff. This too was needed to retain their best staff, and along with it, the relationships and loyalties with their traditional customers... a very important aspect you pointed out below.
Vaygor1

Vaygor1

03-02-2013, 03:08 PM

Vaygor, I was a PGW (or WRI as it was then) shareholder in 2005, the same time period you are assessing for ALF. That was the year that Rural Portfolio Investments took a controlling stake in WRI. Back in those days WRI was not as it is now (they had not yet merged with Pyne Gould Guinness and were in the throws of swallowing Willaims and Kettle). However the Grant Samuel compiled, Wrightson commissioned takeover report of the time does have some interesting comments on the outlook for trading livestock in FY2005. The report is dated September 2004 and I quote from page 9.

"Wrightson is New Zealand's largest and only nationwide livestock business serving the needs of farmers, meat processors and others in the livestock industry. The livestock operations include a core sale agency business, a live export operation, Wrightson Velvet and Integrated Livestock management. The business is primarily based on a sales margin/commission model, and accordingly when sales volumes or sales prices reduce income to Wrightson is also reduced. Given the heavy reliance on the agency business, profitability of the livestock division is impacted by the changing values and volumes of livestock being sold. Livestock prices peaked in 2002 and since then have progressively declined (Snoopy note: PGW EBIT for livestock subsequently rebounded in FY2005, but I don't know if this was a 'market effect' or a 'merger effect'). Accordingly the EBIT of Wrightson Livestock has reduced from $11.9m in 2002 to $4.2m in 2004. Livestock has a high fixed cost structure which further exacerbates the the variability in earnings."

"A relatively new initiative is for the Livestock business to procure specified live weight sheep for processors. Wrightson enters into agreements with farmers for the supply of product to very specific parameters through the season (Snoopys note: this sounds like a forerunner to the more recent Silver Fern farms supply agreement that went disasterously wrong for PGW - resulting in a multi million dollar contract write down- when they realized that would not be able to get the volume of stock they signed up to purchase for Silver Fern farms). As processors become more demanding in their requirements, this method of livestock procurement is expected to become more common. This method provides Wrightson with a more certain income stream (Snoopy adds: except when the shortage of supply of stock means an agreement like this causes a major default, with multi million dollar writedown implications)."

I realise that none of the above directly relates to ALF, but I do believe the comments are general enough to point to the same kind of market pressures that ALF woudl have been facing at the time, and indeed faces now.

SNOOPY

Quite right Snoopy.
2005 was not an easy year for ALF.
2005 was also a bad year for their merchandise division.
This makes 2005 a good year to select when trying to get a handle on what ALF might be able to recover to in the medium to long term.
Vaygor1.

Vaygor1

03-02-2013, 03:25 PM

Didn't you just answer your own question above Vaygor? Employed Livestock agents are only 1/3 of what they were once (your figure). So in order to stand still in terms of dollars generated each remaining employee is going to have to generate three times the business they did in 2005, to get commission levels back up to 2005 levels. This should be easy to achieve. Instead of working 8 hours per day the emplyees could work 24 hours per day ;-P.

SNOOPY

Hi Snoopy.
1/3 the agents than required in 2005 generating 1/4 of 2005's income sounds like a 7 hour day to me (or a less efficient 8 hour day).
I wish I had more time in my days too!
Certainly ALF is currently a smaller operation but I don't see any difference in what ALF is doing now in comparing its business to 2005 (apart from of course no merchandising).
Vaygor1

Balance

05-02-2013, 08:41 AM

Hi Snoopy.
1/3 the agents than required in 2005 generating 1/4 of 2005's income sounds like a 7 hour day to me (or a less efficient 8 hour day).
I wish I had more time in my days too!
Certainly ALF is currently a smaller operation but I don't see any difference in what ALF is doing now in comparing its business to 2005 (apart from of course no merchandising).
Vaygor1

Big difference between 2005 and today is that ALF today is flat broke and surviving on the whim of the Crown.

winner69

05-02-2013, 10:17 AM

Vaygor1

05-02-2013, 02:02 PM

Big difference between 2005 and today is that ALF today is flat broke and surviving on the whim of the Crown.

Some might say that even in 2005 ALF was close to flat broke as well ... or heading that way anyway

Winner & Balance.

Well ALF is still pretty much flat broke I agree.... even more than flat broke in recent times.
In many ways, I am astonished they didn't go completely belly-up in the past few years.

Somehow they have hung on, and I have wondered if the government wants some kind of success story out of this.
Its collapse with Hanover was a very public affair, farmers and National have always had a thing going over the decades, Watson & Hotchins are still to go through the court process, CMAL seem to be very obliging to ALF.

Your views raise an issue that does concern me and that is one of technology... transportation technology, internet technology, quality control technology.... buying and selling over the internet, stock information and index availability, freezing works automatically determining fat-content of animals and paying a $/beast accordingly.

Are traditional sales yards needed to the extent they used to be? Do farmers and freezing works still have to view the herd or flock before buying? Are stock brokers needed to the same extent as pre 90's and is this reflected in 2005 and earlier? Have the fundamentals that formed the basis of ALF's traditional business changed? In today's world, standing still is going backwards.

The above are the issues that worry me the most. ALF's results over the last few years have gone from disastrous, to incredibly bad, to very bad, to bad, to (potentially) promising. And they really do seem to have hauled themselves out of the sh*t finally in the last 6 months.

Last financial year their revenue was over NZ$20M. The huge annual interest bill they have been paying is virtually gone, along with the massive asset right-downs and the onerous cost of managing all those septic assets. At their last AGM their existing business appears to be heading towards a success story.

Last year I bought an enormous amount of ALF and it cost me next to nothing... in fact a lot less than I gain or lose on paper virtually every day on the NZ stock market with my other holdings. In my mind I've already written off the amount I put in. I just think there is very good potential here given the current price, a new board, new CEO, and ALF's trend of late.

If they have survived to now (which they have) I can't see them going broke just yet. I am looking forward to their 6 month result end of this month (maybe early March).

Balance

05-02-2013, 03:25 PM

Good luck.

I read the same thing about Feltex and Fortex before they went broke.

Vaygor1

05-02-2013, 06:47 PM

Good luck.

I read the same thing about Feltex and Fortex before they went broke.

So did I Balance.

There are a few differences between Feltex, Fortex, and Allied Farmers though.

Feltex took 18 months to go from IPO to liquidation, with large questions still remaining today on Directors' alleged breaches of acts, negligence, dishonesty, and deception.

The Fortex demise caused a huge shock. In 1987 it was a darling stock, and wasn't it named Company of the Year in 1990?... Anyway, eventually the true extent of fraud emerged. Graeme Thompson was convicted in 1996 and sentenced to six-and-half-years' jail for falsifying the Fortex accounts along with other accomplices.

The jury is still out regarding any dirty business re Hanover but for ALF I think they just lost their way, seriously lost their way... possibly negligent but I don't think so.

ALF's position now is orders-of-magnitude better than it was at it's lowest point post Hanover. I think the chances of ALF going completely down the gurgler were much much greater then than now.

So I have dared to chance that ALF's teeth might just have some skin on them. Not expecting anything brilliantly positive in the 6-month report due out soon but I do expect to see improvement....The trend is your friend.

RazorX

11-02-2013, 12:52 PM

This report out today. https://nzx.com/companies/ALF/announcements/232797

Does that affect your assessment of ALF Vaygor?

blobbles

11-02-2013, 01:20 PM

The beginning of the end? I suppose you could argue the beginning was about 3 years ago... sell sell sell... there's a very real chance of belly up here...

minimoke

11-02-2013, 02:52 PM

I’d just remind people if you chase a dog with fleas you’re bound to get bit – its just the size of the bite that’s yet to be determined.
The dog is whining, the Camels braying and the fat lady's gargling in the wings.

blobbles

11-02-2013, 05:15 PM

ALF's position now is orders-of-magnitude better than it was at it's lowest point post Hanover. I think the chances of ALF going completely down the gurgler were much much greater then than now.

Interesting to know if you still feel this way Vaygor. Someone is demanding money from them that they don't have. They have next to no assets meanwhile their business is running at a loss meaning they they really can't pay their bills. Punting on these guys now means you are assuming they can negotiate with the current debtors to hold off and then make a profit to start becoming viable. Neither looks particularly promising right now...

I hope they can get through this crisis, maybe a capital raising from their loyal supporters, but I don't like the look of it.

Balance

11-02-2013, 10:10 PM

Interesting to know if you still feel this way Vaygor. Someone is demanding money from them that they don't have. They have next to no assets meanwhile their business is running at a loss meaning they they really can't pay their bills. Punting on these guys now means you are assuming they can negotiate with the current debtors to hold off and then make a profit to start becoming viable. Neither looks particularly promising right now...

I hope they can get through this crisis, maybe a capital raising from their loyal supporters, but I don't like the look of it.

Loyal supporters?

You mean like the directors who merged ALF with Hanover? A dog plus a dog = two dogs?

minimoke

12-02-2013, 11:41 AM

I told a Woman friend of mine to get out at 11c 3 or so years ago, she did, now she looks at that as experience, ahh 50K goes quite quickly if not looked at...
Ah, three or so years ago. Those were the days. Back when the numpty Hanover (and United) holders decided getting 70c for their dollar was a good deal since the $400m Hanover book would be well managed by ALF and they would get more back a bit later. Back when the board of ALF had their existing shareholders bent over a table with their pants around their ankles. Back when ALF had come off that dreadful slide from $3.20 to 30c and all was looking rosy. Those were the generous days when the numpties gifted Hotchin and Watson $20m and then went on to bleat about Paratia Drive. ALF was about to hit the NZX50 and Hanover holders were happy because there were way more shares around which automatically made then way more richer.

Math has never been a strong point of mine but anyone care to work out what the Hanover 70c is now worth? Is it around 2c?

J R Ewing

12-02-2013, 12:10 PM

You are forgetting the 100 for 1 share consolidation. The true figure is around .02c

Balance

12-02-2013, 12:56 PM

I was under the impression a dog + a dog = POLAR BEAR (which actively hunts humans)...

Or Alf + Hanover =Mark Hotchin and Eric Watson Laughing Their Heads off?

Minerbarejet

12-02-2013, 01:14 PM

Ask Loughlin and Alloway about that one

Balance

12-02-2013, 01:39 PM

Ask Loughlin and Alloway about that one

No need to?

They are also both laughing their heads off as ALF was goneburger but for the short term 'fix' from Hanover.

Probably allowed some of them to sell out in a big hurry before the whole thing came crashing down?

Vaygor1

14-02-2013, 05:01 AM

Hi all.

Wow. Nice surprise I see logging in. We just might have a forum and some fun here.

Sorry I've been away for a while guys and girls. Been shifting countries so a real lack of internet and when available, lack of time to address this forum (which I have come to like very much).

I am sorry to disappoint by commenting now on what must have been on all your minds for a few days with the old 'Hey, Vaygor's gone all quiet ain't he?" thought.

I am writing ad-lib at the moment but I am encouraged to see such a response suddenly from the depths of the theatre so-to-speak. Up until now the silence has been deafening and this kind of event is exactly what this thread needs.

Anyway, please, give me a night to digest what is below. I haven't absorbed it yet but I trust this will be fun.

More very soon.

Vaygor1.

minimoke

14-02-2013, 11:18 AM

Anyway, please, give me a night to digest what is below. I haven't absorbed it yet but I trust this will be fun.

I admire your optimism - you still think ALF will be around tomorrow.

It looks like the market is also taking the CAMeL's silence as an optimistic sign. There are still bids above 2c. But consider ALF don't have $540k cash on hand. Their market cap is $2.4m with a NTA of -3.7c and the likelihood that $3.75m in assets will be written off.

As Chair Bluett’s got a $20 stake in the company – that goes to show how optimistic he is. I can only speculate that he anticipates making more out of his Director fees than anything else.

If I was that 200,000 seller I’d be taking the 2.1c bid. That way at least I’d be guaranteed a winter trip to the gold coast with a bit of duty free. That equals a whole lot more fun than being the last man standing. It won’t be long before those 200k shares won’t be worth enough to buy a glass of Pimms at the local Lawn Bowls club.

minimoke

14-02-2013, 12:18 PM

If I was that 200,000 seller I’d be taking the 2.1c bid.

Dang, have I just dropped 22% off ALF's value? Someone jsut sold out at 2.1c!

minimoke

14-02-2013, 03:57 PM

Dang, have I just dropped 22% off ALF's value? Someone jsut sold out at 2.1c!
And wasn't he lucky. The person who has sold 15,000 at 1.8c now only has a one way ticket to the Gold Coast. Great way of increase the average IQ of both countries I reckon.

J R Ewing

14-02-2013, 04:08 PM

And wasn't he lucky. The person who has sold 15,000 at 1.8c now only has a one way ticket to the Gold Coast. Great way of increase the average IQ of both countries I reckon.

I didn't realise you were one of Rob's Mob!

Vaygor1

15-02-2013, 09:47 PM

This report out today. https://nzx.com/companies/ALF/announcements/232797

Does that affect your assessment of ALF Vaygor?

Interesting to know if you still feel this way Vaygor..... Someone is demanding money from them that they don't have. .... I hope they can get through this crisis, maybe a capital raising from their loyal supporters, but I don't like the look of it.

I admire your optimism - you still think ALF will be around tomorrow....

..... It won’t be long before those 200k shares won’t be worth enough to buy a glass of Pimms at the local Lawn Bowls club.

Well hello everyone.

It is nice to know that my efforts in detailing ALF over the last month or so haven't gone unnoticed. For a time there I was beginning to think I was the only shareholder or interested party left on the planet.

And I am encouraged by the fact that there is (hopefully) a slight interest out there in what I think given the recent news.... so here it is.

In my most humble of opinions this $540k issue is a storm in a teacup. By comparison to the problems that ALF has had in the past few years this issue is petty cash and if it weren't for the NZX rules, would hardly warrant a mention.

I am not saying (and have never said) that ALF won't impersonate a frog and croak. What I have said is that the odds of that occurring now are far far less then in the past since they began buying sawmills. And this is what I still think.

I for one will not be selling any. I have bought a lot of ALF for a paltry sum; less than I donate annually to charity, so I really do have nothing to lose. I really love your contributions Minimoke; they will never cease to make me smile and I am glad to see you're back.

Just to paint a picture here, If I were to buy 500,000 shares in ALF at 1.8c/share; that is over 0.5% of the entire company, I would not even make minimum brokerage.

If ALF have to write down the $3.75M or the lions share of it due to this loan enforcement then that will hurt their 6 monthly report. They will likely make a small loss instead of a small profit.

Those who win in this share market game do so at the expense of those with fear and greed. Right now for ALF it is all fear.

Vaygor1

17-02-2013, 01:43 AM

About 30 hours since my post below.
I would have thought I'd got some bites by now... not even a nibble? :mellow:

Can someone tell me if it's right to answer a rhetorical question?

digger

17-02-2013, 09:23 AM

About 30 hours since my post below.
I would have thought I'd got some bites by now... not even a nibble? :mellow:

Can someone tell me if it's right to answer a rhetorical question?

Probably because it is the walking dead and no one is really interested anymore. I would say the main asset ALF has is the 70% holding in NZ Farmers Livestock. This firm trades in Morrinsville and I know the staff,but for some reason the staff do not know that 70% of there company is owned by ALF. Just two weeks ago I was talking to one of the top guys who wanted me to come back and trade with them[I was the one mentioned in a previous post who left ALF as it is shakey} and I said ALF would probably go under.He said who cares as he does not seem to know that there main asset is NZF Livestock.

If you do not know the NZF livestock structure just google it and ask. In dec 2011 it has 70% ownership by ALF and if this has been sold since I am not aware.

Balance

17-02-2013, 10:19 AM

Probably because it is the walking dead and no one is really interested anymore. I would say the main asset ALF has is the 70% holding in NZ Farmers Livestock. This firm trades in Morrinsville and I know the staff,but for some reason the staff do not know that 70% of there company is owned by ALF. Just two weeks ago I was talking to one of the top guys who wanted me to come back and trade with them[I was the one mentioned in a previous post who left ALF as it is shakey} and I said ALF would probably go under.He said who cares as he does not seem to know that there main asset is NZF Livestock.

If you do not know the NZF livestock structure just google it and ask. In dec 2011 it has 70% ownership by ALF and if this has been sold since I am not aware.

I know of individuals who took huge positions in Feltex and Fortex as they went down and down, and then went broke.

I know of individuals who took huge positions in News Corp and Air NZ as they went down and down, and then revived spectacularly.

Is ALF a Feltex or is it a News Corp?

Is ALF a Fortex or is it an Air NZ?

Better things to do in life than to bet on a walking dead.

Funny how moths keep flying at an open flame until their wings are burnt off and they drop to the ground to die a slow death, or get eaten alive.

Vaygor1

18-02-2013, 04:23 AM

I don't look at ALF as the "walking dead" but more like the "crawling alive".
Your view is correct Balance.
This last $540k could be straw that breaks the CAML's back....
..... or ALF just might stand up and start walking again, but I think we might have wait 6 months more for that to happen now.
Only 2 weeks more to wait for fresh data.

minimoke

18-02-2013, 08:14 AM

Is ALF a Fortex or is it an Air NZ?

I followed the Air NZ knife as it fell and put a $15k hand out to catch it 2 cents off its bottom. That was a decision made for political reasons not financial. I had the view that the government would not let the national flag bearing airline collapse. Thankfully I was right and that punt paid off handsomely.

I see ALF in a little of the same light since CAMeL is there to maximise the Crowns (taxpayers) generosity in bailing out dodgy finance companies backed by the misguided, greedy and financially illiterate. It is there to get the very best out of Allied Nationwide Finance. It is not there to prop up some decidedly fragile company because it can’t pay a well overdue debt. Has anyone seen the govt rush in to prop up subcontractors after the Mainzeal receivership – No! So why should they for ALF?

So politically, there ought to be no will to keep ALF going. The govt is very keen to let the “market” decide things so CAMeL is likely to stay out. Vaygor – you will know CAMel’s position before two weeks is out. By my reckoning your clock should be set for the 25th of Feb rather than waiting a couple of weeks for fresh data.

minimoke

18-02-2013, 09:53 AM

Yep, you can't knock buying on the way down. It's a must if you want to own stock cheaply. .
I’ve never bought on the way down. I’ve bought, and bought once, at a point where I think there will be a recovery. I think buying on the way down is madness

I’ve never really taken to the idea of dollar cost averaging on a falling stock. The math never added up. Say I was to take $1,000 and buy 1000 “ALF” shares and then “ALF” hits 50c. My original $1,000 has taken a 50% hit. If I want to get it back to $1,000 “ALF” would have to make a 100% gain.

Say I buy another $1000 worth at 50c. It then drops a further 50%. My Original $1000 is now worth $250.and I need a 400% increase to break even.

So I buy another $1,000 at 25c. And these loose 50%. My original is now worth $125 and I need an 800% increase to break even.

For my forth trade I’ll spend another $1000 but I take another 50% hit. My original is now worth $62.50.

So after four trades my $4,000 is worth $937. I’ve now ventured well and truly into 10 bagger territory and we all should know how elusive that Holy Grail is.

The winner with this approach is of course the broker.

Vaygor may argue the chance of ALF taking 4 50% drops is improbable. I suggest he re-reads this thread.

minimoke

18-02-2013, 11:37 AM

it never hurts to split that money into 3 lots and buy incrementally if you truly believe it will rebound. If the stock goes down, sweet, you can buy again to take the average price down. If it goes down again, you can buy further. However, the main thing is you need to believe the stock is going to rebound if you do this!

It still doesn’t make sense.

Say you have $3,000 and you bought $1000 ALF at $0.04, another $1000 at $0.035 and a further at $0.03. That’s your three trades done for 88,053 shares. Today they are worth $1,761 because someone will buy them at $0.02. To recoup your $3,000 plus four lots of brokerage you will need to sell at $0.035. That is well above the value pre loan enforcement announcement.

Now the people who are wanting to enforce the loan have inside knowledge so they have a very good understanding of ALF’s financial position and they don’t consider the $0.029 value, when they sent their letter, sustainable. When ALF had a market cap of $2.4m they announced they didn’t have $540k on hand and were likely to write off another $3.5m. What in this scenario suggests a value of $0.35? Any Hanover investors out there who can shed some light on what the good news actually is?

minimoke

18-02-2013, 11:59 AM

I think you missed my statement saying you need to BELIEVE that the stock is going to rebound.
I did see it - thats why I asked for Hanover investors to shed some light since the evidence suggests they base their decisions purely on belief

minimoke

18-02-2013, 12:26 PM

Are we seeing a bit of market manipulation today? Someone with $50 has just picked up $17 worth of shares from the 130,000 seller for an 11% increase in market cap.

Baddarcy

18-02-2013, 12:37 PM

Yes, someone was doing it for three days last week to NTL, bumping up the SP at the end of the day. Didn't really get any takers to it though; most traders aren't that dumb...

yeah seen similar trades in DIL too. I wrote it off as micro trading software as i keep hearing adds on the radio as i drive to work each morning talking about it. Still can't believe people are that dumb...... :-)

J R Ewing

18-02-2013, 01:07 PM

Are we seeing a bit of market manipulation today? Someone with $50 has just picked up $17 worth of shares from the 130,000 seller for an 11% increase in market cap.

What a waste of $17.40!! They could have bought a lotto ticket for less than that!

minimoke

18-02-2013, 02:31 PM

Well its certainly an intersting days trading. Firstly someone drives the value up 11% on one miniscule trade.

Now we have someone driving the value up to 2.1c (spending $5,400) and then dragging it down to 1.8 spending $3,300. Thats a dollar average of 1.9c. Thats just nuts. And why wouldn't he spend another $5 to mop up the last 300 on offer at 1.8C. His budget must have been $9,300 and not a penny more

In the meantime the first investor is weeping, having seen 10% written off their play.

minimoke

18-02-2013, 04:43 PM

In the meantime the first investor is weeping, having seen 10% written off their play.
And now the "serious" bids come in at 1.5c. So thats a 25% loss on the day meaning he needs a 33% increase in value to break even. Can his 870 shares even buy a lotto ticket now?

But there is a new heavy hitter in the wings - 15,000 at 1.1c. These Hanover types sure know how to spend their hard earned loot.

If we needed a better example of why nutters should be kept in the asylum rather than let loose in society we only need to observe the ALF buys.

Vaygor1

18-02-2013, 05:11 PM

And now the "serious" bids come in at 1.5c. So thats a 25% loss on the day meaning he needs a 33% increase in value to break even. Can his 870 shares even buy a lotto ticket now?

But there is a new heavy hitter in the wings - 15,000 at 1.1c. These Hanover types sure know how to spend their hard earned loot.

If we needed a better example of why nutters should be kept in the asylum rather than let loose in society we only need to observe the ALF buys.

In case you've been wondering, I haven't been buying any Minimoke. The time zone I'm in means I'm very lucky if I wake up in time to catch the last hour of any trading day.

I can't figure out why someone would put in a buy order at all for 15,000 shares at 1.1c. Thats a $165 purchase +$30 or 18.2% on top for brokerage. I have trouble enough accepting 0.3% brokerage. But I know... using percentages as a measure when the sp is this low doesn't really work.

Vaygor1

18-02-2013, 07:19 PM

[QUOTE=Vaygor1;393677]About 30 hours since my post below.
I would have thought I'd got some bites by now... not even a nibble? :mellow:

Can someone tell me if it's right to answer a rhetorical question?

Probably because it is the walking dead and no one is really interested anymore. I would say the main asset ALF has is the 70% holding in NZ Farmers Livestock. This firm trades in Morrinsville and I know the staff,but for some reason the staff do not know that 70% of there company is owned by ALF. Just two weeks ago I was talking to one of the top guys who wanted me to come back and trade with them

Hi Digger.

Yes I am fully aware of this, refer https://www.nzx.com/companies/ALF/announcements/216844 and my post (#706) on this thread.
You may also know that NZFLs assets and trading accounts are excluded from ALFs existing security arrangements with ALFs secured lender(s) and this means you can trade Livestock through MyLiveStock (ie NZFL) without worrying about what might happen to ALF while the transactions are in midstream.

Your view means a lot to me as your perception of risk (be it right or wrong) is indicative of the perceptions of others who may be thinking about being NZFL's customers. Not sure if NZFL is ALF's biggest asset or not, but the entity is very important to them.

You may need to check the Morrinsville component. This from ALF's latest annual report (you will need to read it in context under note 14):
[I]Allied Farmers Ltd sold it's interest in the Morrinsville saleyard as part of the sale of the livestock business. The Sale and Purchase agreement of Allied Farmers Ltd's interest in the Morrinsville saleyard to Stockmans Holdings Ltd includes the option for NZ Farmers Livestock Ltd to purchase the Morrinsville saleyard in the event of a change of control or insolvency event of Stockmans Holdings Ltd or Allied Nationwide Finance Ltd (in Recevership) no longer being the secured lender of Allied Farmers Ltd.