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Allied Farmers Seeks $19.30 million
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.
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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 11:21 AM.
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Originally Posted by Roger
Originally Posted by Alan3285
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.
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Originally Posted by Alan3285
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
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Originally Posted by winner69
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.
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Originally Posted by Alan3285
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 12:44 PM.
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Originally Posted by Roger
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.
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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.
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Originally Posted by Roger
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.
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Originally Posted by Alan3285
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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