Allied Farmers' attempt to raise $19.3 million capital has hit a snag as its trustee continues to ask questions about a breach of financial trust deed obligations by its finance subsidiary, Allied Nationwide Finance.
The company had set a record date for the partially underwritten capital raising of tomorrow, August 10, but has opted to delay, says Allied Farmers chairman John Loughlin.
"Our preference is for the prospectus to disclose the very latest information, and with our Trustee having some questions over our finance subsidiary we feel it is prudent to delay the prospectus.
"We believe the Trustee's concerns can be resolved quickly and we have been working towards a speedy resolution since we were informed of NZ Guardian Trust's concerns on Friday. "
Loughlin says at issue is its "future liquidity position and how it would be funded after the Government's guarantee expires on October 11".
"The finance business has been self funding for the last three years or so. While our current audit is yet to be signed off, our numbers show that continues to be the case, and we are confident we will continue to have or obtain sufficient funds necessary to pay back debenture holders."
He also says a solution might involve Allied Farmers contributing further capital to Allied Nationwide Finance, perhaps out of assets recently acquired from Hanover Finance and United Finance.
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