Allied Farmers CEO Rob Alloway to step down in December; deals likely within weeks to reduce debt

Allied Farmers Chief Executive Rob Alloway has announced he will step down as Chief Executive in December and that deals are likely in the next few weeks to substantially reduce the group's debt.

Alloway is the group's major shareholder and was the driving force behind the deal to buy Hanover Finance's loan book from its debenture holders with more than 1.9 billion new shares new shares worth 20.7 cents. The price of those shares has since collapsed to 2.5 cents in the wake of revelations the Hanover loan book was worth a fraction of its valuation at the time of the. Allied Farmers' finance company Allied Nationwide Finance was put into receivership on August 20.

Allied Farmers now owes the receivers of Allied Nationwide Finance tens of millions of dollars and is scrambling to refinance or restructure loan facilities worth NZ$19 million with Westpac. See more detail in Gareth Vaughan's story here and here.

Alloway would remain on the board of Allied Farmers while a search for a new CEO is undertaken before December, Allied Farmers 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,” Alloway said in a statement.

Allied Farmers' board said it acknowledged 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," Alloway said.

“My key goal was to establish a more stable financial platform and normalise the company’s banking and other commercial arrangements," he said.

"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.”

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.”