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  1. #11
    Member Alan3285's Avatar
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    Default Allied Farmers Seeks $19.30 million

    Quote Originally Posted by Allied Farmers Announcement
    as at 09:53:39, Tuesday 03 August, 2010 (NZT)
    GENERAL: ALF: Allied Farmers Seeks $19.30 million

    ALF
    03/08/2010
    GENERAL

    REL: 0953 HRS Allied Farmers Limited

    GENERAL: ALF: Allied Farmers Seeks $19.30 million

    Allied Farmers Seeks $19.30 million

    Allied Farmers today announced a partially underwritten $19.30 million
    capital raising as the company seeks further cash injections to achieve
    longer term business plans and reduce debt.

    The capital raising, which has been partially underwritten by McDouall Stuart
    Group Limited for $9 million, will consist of two parts:

    An institutional placement raising $2.25 million at 2.5 cents per new share;
    and

    A rights issue to current Allied Farmers shareholders entitling
    them to 1 new share at 2.5 cents for every 3 shares held.

    Allied Chairman John Loughlin said McDouall Stuart had today arranged a
    placement of $2.25 million to a number of institutions and professional
    investors, which when combined with the underwritten component of the total
    capital raising would mean that at least $9 million would be raised.

    "I am also encouraging our current shareholders to take up their rights, not
    only to support the business and its future plans, but also to avoid any
    dilution effect from the capital raising".

    "In raising any capital we are mindful of the interest that has been shown by
    a number of our investors in supporting the company. We have decided that the
    rights issue with a placement is the best current option for us to bring in
    fresh capital to launch some of our planned initiatives and gives us the time
    needed to realise good value from our asset portfolio, and continue our focus
    on reducing debt. We are conscious of giving existing investors the
    opportunity to further invest in the company and believe rights issues are
    the appropriate format to look after the interests of existing investors."

    The new shares will be offered at 2.5 cents per share, which represents a
    discount to Allied Farmers' current share price of approximately 5.5 cents
    per share. In addition, to protect investors in the capital raising from any
    future erosion in the net tangible assets of Allied Farmers, the number of
    shares issued will be increased next year if the Group's net tangible assets
    are less than the issue price at the June 30, 2011 financial year end. The
    details of this adjustment mechanism will be set out in the prospectus.

    John Loughlin said that given the continuing challenges in the rural and
    finance sectors, coupled with the current market for the realisation of the
    ex-Hanover and United assets, we felt it appropriate to recognise and protect
    the downside risk for investors.

    As an additional benefit, the rights to new shares will be renounceable. This
    means that shareholders who do not wish to subscribe for more shares can sell
    their rights, which may have a value, through the NZX rights trading
    facility. However, for those shareholders who want to invest more than
    their entitlement, provision has been made for oversubscriptions (allowing
    shareholders to apply for additional new shares).

    Allied Farmers has also, subject to compliance with its placement rights
    under the Listing Rules, provided the sub underwriters with a right (but not
    obligation) to apply for any shares not taken up in the offer or committed
    under the underwriting.

    Mr Loughlin said, "Allied Farmers' expects the finance sector and asset
    values to recover in time and the recently completed sale of Five Mile, for
    close to its latest valuation, demonstrates what Allied Farmers can achieve
    from the former Hanover assets. However, in a market in which demand and
    finance for property development was flat, realising good value from further
    asset sales would continue to take time."

    "We continue to seek opportunities for realising value from those assets and
    we have a number of initiatives planned for our rural services businesses
    that will differentiate our business and stimulate our market share."
    "It will take time to fully realise that value, attract fresh capital to
    implement initiatives and reduce debt levels. The recent extension to our
    banking arrangements with Westpac, albeit with restructuring and capital
    raising milestones that are required to be met, signalled confidence in our
    plans, which we too are confident provide a solid foundation for our future
    growth."

    "We are seeing some signs of recovery in the rural sector - especially on the
    back of the dairy payout - and we have confidence that the rural services
    sector, including the finance sector, will recover. But that recovery will
    also take time."

    Mr Loughlin expected the prospectus to be lodged early next week with the
    document in the mail to shareholders from about 11 August.

    Media Inquiries to:
    Malcolm Boyle/Alan McDonald
    Star Public Relation
    Allied Farmers
    09 912 7827 or 021922 022 or 0212 813 004

    Rob Alloway
    Manager Director,
    09 912 7827 or 021922 022 or 0212 813 004 021 376642

    Offer Timetable
    10 August Record date for Rights Issue Entitlements
    11 August Offer opens and prospectus mail out begins
    24 August Rights trading ceases on NZX
    30 August Closing Date for Offer
    6 September Allotment of new shares and statements issued

    6 September New shares begin trading on NZX
    End CA:00197953 For:ALF Type:GENERAL Time:2010-08-03:09:53:39


    I haven't gone through in detail (and we await the prospectus), but it looks like it can only be positive for the ALF010 holders?

    Alan.

  2. #12
    ShareTrader Legend Beagle's Avatar
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    Alan,

    Some perspective. This is a company that did a woefully pathetic job of "so called" due dilligence when they were shafted by the Hand-over guys.
    Present management have a very poor track record.
    They said the shares were worth approx 20 cents when they were issued in respect of the Hand-over shafting, and at the time I was saying the shares were really worth 2 cents, if that.

    Now they agree with me and are saying the shares are really only worth 2.5 cents, hence such a deeply discounted rights issue. With the benifet of some more history and hindsight, the shares from where I sit look completly worthless.

    When will people wake up and smell the coffee and realise that if you have totally incompetent management, extremly poor quality assets and a soft economy, that's a recipe for losing money, there is NO OTHER possible outcome

    Put another way, this company with its truly appalling record, is saying give us some more money, we will look after you. YEAH RIGHT !!
    Last edited by Beagle; 03-08-2010 at 10:21 AM.

  3. #13
    Member Alan3285's Avatar
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    Quote Originally Posted by Roger View Post
    Quote Originally Posted by Alan3285 View Post
    I haven't gone through in detail (and we await the prospectus), but it looks like it can only be positive for the ALF010 holders?
    Alan,

    Some perspective. This is a company that did a woefully pathetic job of "so called due dilligence when they were shafted by the Hand-over guys.
    Present management have a very poor track record.
    They said the shares were worth approx 20 cents when they were issued in respect of the Hand-over shafting, and at the time I was saying the shares were really worth 2 cents, if that.

    Now they agree with me and are saying the shares are really only worth 2.5 cents, hence such a deeply discounted rights issue.

    For the record I think the shares are completly worthless.

    When will people wake up and smell the coffee and realise that if you have totally incompetent management, extremly poor quality assets and a soft economy, that a recipe for losing money.

    This is a sad, sad, saga, that needs to be brought to its inevitable conclusion, receivership ASAP.

    Roger,

    I'm, not sure what analysis you have in there in relation to the bonds (perhaps implicit?) - apologies if I missed it?

    Are you saying that this is not positive for the ALF010 holders?

    Thanks,

    Alan.

  4. #14
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    Quote Originally Posted by Alan3285 View Post
    Roger,

    I'm, not sure what analysis you have in there in relation to the bonds (perhaps implicit?) - apologies if I missed it?

    Are you saying that this is not positive for the ALF010 holders?

    Thanks,

    Alan.
    Prob Roger is saying that positive for bond holders in that it keeps the company afloat a bit longer ...... longer term well maybe the bonds might be worthless as well

    Needing $20m in real money signals to me that they have recovered very little of real money from the hangover assets that was meant to be the capitalisation to end all capitalisations ... what was the value of that new capital now ,,,, that was going to be turned into real money over time

  5. #15
    Member Alan3285's Avatar
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    Quote Originally Posted by winner69 View Post
    Prob Roger is saying that positive for bond holders in that it keeps the company afloat a bit longer ...... longer term well maybe the bonds might be worthless as well

    Needing $20m in real money signals to me that they have recovered very little of real money from the hangover assets that was meant to be the capitalisation to end all capitalisations ... what was the value of that new capital now ,,,, that was going to be turned into real money over time
    That's the way I see it - this can only be positive news for the ALF010s.

    If they get the whole $20m then that is another $20m that further secures the bonds on top of whatever the total amount recovered from the Hanover assets.

    These bonds have only gotten more secure in the last nine months?

    Alan.

  6. #16
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Alan3285 View Post
    That's the way I see it - this can only be positive news for the ALF010s.

    If they get the whole $20m then that is another $20m that further secures the bonds on top of whatever the total amount recovered from the Hanover assets.

    These bonds have only gotten more secure in the last nine months?

    Alan.
    Alan, To be fair I am just venting my spleen, this whole Hanover Rort and the way the current ALF "management" if you can call them that have handled the whole thing is truly reprehensible. They havn't a single shread of credibility left in my opinion.

    Sure if they can raise the money in the only "partially" underwritten rights issue, that'll keep them going a bit longer but wouldn't you be better off down at the casino if you want to have a punt at least down there you can manage your own money rather than let those completly incompetent fools at ALF do it.

    I refuse to back any company whose directors and management are coimpletly inept and totally incompetent, penny dreadfuls or otherwise.

    That's my 2 cents worth I know its not terribly analytical or scientific but in my opinion ALF's record speaks for itself and to me it screams You'd have to be crazy to invest in this rotten dog.
    Last edited by Beagle; 03-08-2010 at 11:44 AM.

  7. #17
    Member Alan3285's Avatar
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    Quote Originally Posted by Roger View Post
    Alan, To be fair I am just venting my spleen, this whole Hanover Rort and the way the current ALF "management" if you can call them that have handled the whole thing is truly reprehensible. They havn't a single shread of credibility left in my opinion.

    Sure if they can raise the money in the only "partially" underwritten rights issue, that'll keep them going a bit longer but wouldn't you be better off down at the casino if you want to have a punt at least down there you can manage your own money rather than let those completly incompetent fools at ALF do it.

    I refuse to back any company whose directors and management are coimpletly inept and totally incompetent, penny dreadfuls or otherwise.

    That's my 2 cents worth I know its not terribly analytical or scientific but in my opinion ALF's record speaks for itself and to me it screams You'd have to be crazy to invest in this rotten dog.
    I don't agree - I am in the money on my ALF010 but I am not selling at this point.

    The yield is good for the relative risk (which seems to have been falling since the time the Hanover deal was first announced), and the security is getting better.

    If your risk appetite is not great, you might be better off in ASB with a term deposit than these types of bonds.


    Alan.

  8. #18
    ShareTrader Legend Beagle's Avatar
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    Good luck Alan, ALF have a record of wealth destruction and have proved themselves appallingly bad at extracting any value from Hanover's receiveables, then again, there was probably very little there in the first place. Of course credible management who did even a half way reasonable job at due diligence would have allready known that.

  9. #19
    Member Alan3285's Avatar
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    Quote Originally Posted by Roger View Post
    Good luck Alan, ALF have a record of wealth destruction
    Not for me they haven't ;-)

    They have been my second best performer in the last 12 months behind SCF only - that's looking at pure 'gains' only.

    Whilst making great gains, I have also been yielding an average of about 26% pa while holding them.

    I'm fairly happy with that so far....

    Alan.

  10. #20
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    Quote Originally Posted by Alan3285 View Post
    Not for me they haven't ;-)

    They have been my second best performer in the last 12 months behind SCF only - that's looking at pure 'gains' only.

    Whilst making great gains, I have also been yielding an average of about 26% pa while holding them.

    I'm fairly happy with that so far....

    Alan.
    26% alone tells you what the market thinks of the risk?

    I can remember Skellerup bonds giving investors 35% pa return - then it blew up.

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