Allied Farmers writes off more of Hanover assets
Allied Farmers says it has written down the former Hanover assets by a further $12.62 million.
Tuesday, March 1st 2011, 6:48PM
by Jenny Ruth
That contributed to its $20.6 million net loss for the six months ended December 31, up from the $15.7 million net loss it reported for the same six months a year earlier.
The Hanover assets sold to Allied in late 2009 were then valued at a gross $396.2 million and Allied finance wrote off $20.2 million at June 30 last year.
"The group is still carrying $13.29 million of debt transferred from Hanover and a strong focus in the second half will be to repay or restructure a large part of this debt," the company says.
In an obvious retort to Hanover director and shareholder Mark Hotchin's high profile accusations that Allied has been conducting a fire-sale of Hanover assets, Allied Finance says it has sold some former Hanover assets above valuation.
"While some properties have been sold below valuation, reflecting the current market, some have been realised at valuation or, in some cases, above valuation,"
Allied Farmers managing director Rob Alloway says Hotchin's accusations are "a sideshow. It diverts my attention away from trying to fix the issues."
The company has made a lot of progress in reducing debt, he says. Total liabilities fell from $407.4 million at December 31, 2009 to $69.3 million a year later. About $2.2 million in costs has been taken out of the business in the last six months, he says.
"It's very easy to point to the operating loss, as I'm sure many in the media will, and say this is a poorly run business," Alloway says.
Allied Finance says it is pursuing a number of deliquent Hanover borrowers, "many of whom are forcing us into litigation for recovery of debt.
A full trial over the $5 million Allied Farmers is refusing to pay Hanover, alleging material breaches of contract, is set to begin in May.
"We will be vigorously defending that claim. We think we've got plenty of grounds to do that," Alloway says.
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