Allied Farmers to "renegotiate" debt terms with Westpac

Allied Farmers says the demise of its subsidiary Allied Nationwide Finance means milestones on its Westpac debt facilities require renegotiation.

(Updated with link to earlier story and addition of McDouall Stuart as lead manager of potential capital raising).

The company says it currently has senior debt with Westpac totalling NZ$16.9 million.

Also see: Allied Farmers still faces Allied Nationwide tab in tens of millions.

Read Allied Farmers statement below:

On 23 July 2010 Allied Farmers announced that the extension of its Westpac banking facilities to 31 March 2011 was granted as part of an agreed series of debt retirement and restructuring initiatives, and that these initiatives had agreed milestones, which, if not met, would result in Westpac having its usual rights as lender.

On 20 August 2010 Allied Farmers announced that its wholly owned subsidiary, Allied Nationwide Finance Limited, had been placed into receivership by its debenture holder trustee, NZ Guardian Trust. The Allied Nationwide Finance receivership has meant that the milestones for the agreed Allied Farmers debt terms, including debt retirement and its restructuring initiative, will require renegotiation.

Allied Farmers is in constructive discussions with Westpac and the lead manager (McDouall Stuart which is led by Allied Farmers director Andrew McDouall) of its previously announced rights issue. Allied Farmers notes some media speculation today on the extent of its senior debt to its senior lender Westpac.

Allied Farmers wishes to ensure the market is correctly informed. Allied Farmers currently has senior debt totaling $16.9 million, consisting of a multi option credit facility of $14.4 million, and an overdraft of $2.5 million.