Selling off the good parts of the loan book ( the GOOD ASSETS of any sell off are always the easiest to sell ) which will imho leave the cr@p which no one want.
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Selling off the good parts of the loan book ( the GOOD ASSETS of any sell off are always the easiest to sell ) which will imho leave the cr@p which no one want.
Allied Farmers Asset Valuations Update
Consistent with Allied Farmers’ objective to keep the market fully informed on progress toward finalization of the values of property assets and loan assets acquired from Hanover Finance and United Finance on 18 December 2009, we provide the following update.
On 1 March 2010 Allied Farmers released its interim financial statements for the period ended 31 December 2009. Included in these financial statements were the net assets acquired from Hanover Finance and United Finance on 18 December 2009. The provisional fair value assessment for these net assets was $175.5 million.
On 7 May 2010 Allied Farmers announced a net decrease of $17.9 million from $105.4 million to $87.5 million in the value of its property assets acquired from Hanover Finance and United Finance. The property assets are properties previously directly owned by Hanover and United and now directly owned by Allied Farmers. These include industrial development land in Queenstown, and various lifestyle sections and properties around New Zealand.
In the 7 May 2010 announcement Allied Farmers also indicated that the value of the loan assets acquired from Hanover Finance and United Finance on 18 December 2009 is likely to be subject to an increase in impairment provisions, but at that stage it was too early to determine the extent of the impairment. The loan assets are loans made by Hanover Finance and United Finance (as lender) that have been transferred to Allied Farmers. These loans are typically secured over properties that are in various stages of development, ranging from bare land to completed and tenanted projects. The loans were recorded in the 31 December 2009 Interim Financial Statements at their provisional fair value assessment of $106.6 million.
As part of the process for the preparation of the 30 June 2010 financial statements Allied Farmers has now completed assessment work on $69.1m of the $106.6 million loans (being 65 percent) acquired from Hanover Finance and United Finance. As a result of that work, Allied Farmers advises that an increase in impairment provisioning of $33.6 million is required on the $69.1 million of loans assessed to date.
Assessment work is underway on the remaining $37.5m balance of the acquired loan assets not yet assessed. However, we are unable at this stage to determine the extent of the impairment on these loans until we have received further information, such as updated independent valuations on underlying property securities.
Consistent with Allied Farmers previous statements, these loan asset impairment provisions, and the net decrease in the value of the property assets, reflect the challenges in realizing the assets acquired from Hanover Finance and United Finance at the value ascribed in Hanover Finance’s and United Finance’s audited 30 June 2009 financial statements. These reflect the state of the market for both Allied Farmers’ property assets and loan assets secured by borrowers’ properties.
In particular, in relation to the loan assets, the following factors during the 2010 calendar year have contributed to the impairment provision:
• Lower valuations for commercial development land, arising from:
o a tightening of funding for such developments; and
o a lengthening of realisation periods due to longer rezoning processes and delays
• Lower valuations of Auckland apartments arising from a lack of funding and general oversupply.
• The bankruptcy or liquidation of borrowers resulting in forced sales rather than managed sell downs.
The result of our assessment work to date is that the provisional fair value assessment of the net assets acquired from Hanover Finance and United Finance (disclosed in Allied Farmers 31 December 2009 Interim Financial Statements at $175.5 million) require a further impairment provision of $51.5 million. This results in a value of approximately $124 million for the net assets acquired from Hanover Finance and United Finance.
These impairment provisions are subject to further adjustments arising from completion of the work on the remaining $37.5m balance of the acquired loan assets, and audit verification. The final position will be reflected in Allied Farmers 30 June 2010 Financial Statements.
ENDS
The whole writedown saga continues
Shoeshine in a recent NBR column commented that the due diligence must have been a dogs breakfast .... so todays announcement confirms ... $400m of assets now valued at $120m odd with more reviews to be done
Shoeshine also pointed some key dates and events to keep the bankers happy and also mentioned that ANF is experiencing 53% reinvestment rates and asks what happens when the government guarantee runs out.
Still a lot more to come out I think
...I really cannot believe the only things being thrown at hotchins palace are only eggs...and for that matter Hoskings place as well...
The magicians got a Get Out of Jail free card and the holders continue to suffer. The writing was on the wall long while back, but unfortunately the PR spin was so good most was blinded by the BS. Didnt some accounting firm valued the asset at 60 cents during the ALF/Hangover deal?
http://pinoleroyrogers.files.wordpre...k-no-evil1.jpg