Allied Farmers to split its rural and business services

Tuesday 12th May 2009

Allied Farmers, a rural services and finance group, announced it will separate it rural business units into a wholly-owned subsidiary from July this year.

The new entity, called Allied Farmers Rural, will look to allow the “real value generated by the rural businesses to be recorded,” said chairman John Loughlin in a statement. The move would also allow the company to rebalance the group’s structure. In its first-half report, Loughlin noted “there are very good opportunities for continued expansion in our rural business”.

The stock, which trades infrequently, was unchanged at 46 cents, and has tumbled 33% since the start of the year.

The group posted a first-half loss of $2.4 million, down from a profit of $2.4 million in the same period the year before, dragged down by a pre-tax loss of $2.3 million by its subsidiary Allied Nationwide Finance. Its rural businesses increased half-year operating profit 23% to $2.7 million.

The company is seeking to raise $7.5 million to build its balance sheet and reduce core debt, with $6 million underwritten by McDouall Stuart Group. The rights offer closes on May 13.

Allied Farmers will continue to act as the listed entity holding shares, bank debt, and capital notes.

Businesswire.co.nz

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