The receivers of Allied Nationwide Finance (ANF) have provided no estimated recovery range in their first report, but say parent Allied Farmers owes the failed finance company NZ$11.992 million.
About 4,500 ANF secured debenture holders, holding NZ$128 million worth of stock (excluding accrued interest) when the company was tipped into receivership on August 20, will be reimbursed via the Crown retail deposit guarantee scheme. A Treasury spokesman recently told interest.co.nz that ANF debenture holders would be repaid by the end of October.
Receivers Andrew Grenfell and Kerryn Downey of McGrathNicol say in their first report secured debenture holders will get back the principal sum they deposited plus certain accrued interest, subject to the terms of the deposit, the trust deed and Crown deed of guarantee.
"The receivers have reviewed ANF's debenture register and have provided this to Treasury to enable it to undertake its payment process," Grenfell and Downey say.
They note, however, that ANF's perpetual bonds aren't eligible for repayment. The bonds are subordinated unsecured debt and always have been excluded from coverage by the Crown guarantee. ANF has NZ$13.5 million worth of perpetual bonds listed on NZX. It also has bonds, with a face value of NZ$2 million at June 30, that were issued to Speirs Group as part of Allied Farmers' 2008 purchase of Speirs Finance for NZ$5.24 million.
The receivers say ANF had total assets of NZ$152.98 million as of August 31, including NZ$11.992 million of related party receiveables.
Earlier today Allied Farmers said it had reached agreement with ANF's receiver on existing debtor factoring, credit enhancement and related party loan arrangements. Under the agreement Allied Farmers said it would convert these existing arrangements into secured loan facilities with ANF.
ANF's assets also include NZ$3.77 million of cash, NZ$8.5 million of subordinated debt in Speirs Securities, an NZ$8.9 million deferred tax benefit, and NZ$113 million worth of net loan receivables. The receivers said they had omitted their realisation estimate of the assets because its inclusion might prejudice any asset sales. They said they were developing a "realisation strategy" for ANF's assets.
The company had total liabilities of NZ$132.94 million leaving net assets of NZ$20 million, the receivers say.
Preferential creditors, including employees and the Inland Revenue Department, are owed NZ$1.77 million. The receivers said NZ$4.86 million of unsecured payments were owed, but they were not able to determine whether any money would be available to meet unsecured creditors' claims.
ANF's last rites began on August 6 when it pulled its prospectus after trustee Guardian Trust said the company was in breach of its trust deed. Guardian Trust was concerned ANF's total liabilities had exceeded 90% of the value of its total tangible assets, in breach of the trust deed.
The trustee provided ANF 14 days to remedy the position. But ultimately ANF, which had about NZ$70 million worth of debenture stock to repay before October 31, couldn't overcome Guardian Trust's concerns.
Meanwhile, Allied Farmers also said today it had now fully repaid its NZ$16.5 million Westpac term loan. Its overdraft facility had also been reduced to NZ$250,000 from NZ$2.5 million. However, Allied Farmers' latest annual report shows it still has NZ$44.3 million of debt classified as current, meaning it's due for repayment within a year. This is owed to three banks and two financial institutions and is secured against property assets acquired from Hanover Group last December.
(Update adds detail of the ANF listed perpetual bonds).