Allied Farmers bank negotiations going to the wire

Allied Farmers says it's yet to conclude the renegotiation of its bank loans with either existing banker Westpac or another potential un-named lender just three and a half working days before the facilities expire.

Allied, which bought the finance interests of the failed Hanover Finance group last December, said as of today it owes Westpac NZ$16.5 million and also has a NZ$2.5 million overdraft facility with the bank. Both expire on July 1.

“The Allied Farmers business has a number of moving pieces at the moment with asset sales, settlements, banking and financing arrangements," Allied's chairman John Loughlin said.

"The board and management have been working very hard to finalise a number of issues and are conscious that the date for completion of financing negotiations is not far away. In that context we feel it is important that the market be informed of the current position,” Loughlin added.

Allied managing director Rob Alloway recently told interest.co.nz the rural services and finance company was looking to restructure its Westpac debt and was talking to a group of banks.

Read Allied Farmers' announcement below:

On 10 June 2010 Allied Farmers said in a release to the NZSX that it was negotiating its banking facilities for the new financial year commencing 1 July 2010.

Allied Farmers’ principal banker is Westpac New Zealand Limited. 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, expires on 1 July 2010.

These facilities are secured by a General Security Agreement over the assets of an Allied Farmers’ charging group that includes the parent company, Allied Farmers Limited, its wholly owned subsidiaries holding the assets of Allied Farmers’ rural business, and the assets acquired from Hanover Finance and United Finance in December 2009.

The charging group does not include the assets of Allied Nationwide Finance Limited. Allied Farmers advises that negotiation of its banking facilities with Westpac and one other lender proposing to offer funding under a shared security arrangement is continuing.

“The Allied Farmers business has a number of moving pieces at the moment with asset sales, settlements, banking and financing arrangements. The board and management have been working very hard to finalise a number of issues and are conscious that the date for completion of financing negotiations is not far away. In that context we feel it is important that the market be informed of the current position” Mr Loughlin said.