Winner - nah, this isn't how "the rich" act. It is now becoming clear Serepisos (and many others) were nominal owners of assets which were almost entirely offset by liabilities.
That isn't rich.
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Winner - nah, this isn't how "the rich" act. It is now becoming clear Serepisos (and many others) were nominal owners of assets which were almost entirely offset by liabilities.
That isn't rich.
25 August 2010
BANKING FACILITIES UPDATE
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 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.
Classic LOL !! By the way how do you have "destructive" discussions, other than the obvious, (a big argument with your wife in front of the kids), so what the hell's the point of calling these discussions "constructive" other than to imply the lenders are actually quite pleased to have the business, which clearly they're not.
A more correct term other than the above euphamism would be SCF / ALF are in "extremly urgent" discussions, at least that would be calling it what it is.....i.e. it could be argued that the way they write these Press Releases is deliberatly calculated to deceive, or perhaps I'm just being a bit pedantic.
OTOH I could just be sick, like I suspect many others are, of all the b.s. !!
Interesting to compare these banking facility updates ...
August 25: 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.
June 25: [I]As of today the amount outstanding under its Westpac loan facility is $16.5 million ($21.0 million as at 30 June 2009). The loan facility, and an overdraft facility of $2.5 million.
Lizard .... you caused this media speculation and obviously wnat you and the NBR sprculate is a load of codswallop .... seems like nothing untowaed after all and all will be resolved in the next day or two.
Now the market is 'correctly informed/ we all can sleep easy tonight
Was the market 'correctly informed' about Resimac last year?
ALF don't have to report their results until 10 September now.
3 September, 2010
Alloway to Step Down From Allied Farmers
The Board of Allied Farmers announced today that its Managing Director, Rob Alloway, is to step down from his current role in December this year. Mr Alloway will remain on the Board of Allied Farmers and its subsidiaries in the meantime. Mr Alloway has given notice to the Board to allow a timely search for a new CEO and a measured handover of the business.
Mr Alloway said “the time was right to step down from the hands-on, day-today role of running the business as the restructuring process which began about a year ago was nearing completion.”
The Board acknowledged Mr Alloway’s strong and insightful leadership during a period of tremendous change, and said that whilst they were disappointed Mr Alloway was changing his role from an executive, his ongoing involvement as a director means Mr Alloway will continue to contribute to the Company.
“With the restructuring process now coming to an end, and several asset realisations likely in the short term, the company will be in a different position in December when I step down,” said Mr Alloway. “My key goal was to establish a more stable financial platform and normalise the company’s banking and other commercial arrangements.”
MrAlloway said that “we are expecting this process will be completed in the next few weeks leaving the business with substantially reduced senior debt and feel it is right to now give the Board time to identify a new CEO to take the company forward after a challenging period.”
Mr Alloway said staff, suppliers and shareholders had been very patient and that patience and loyalty had given the Board and management the time they needed to navigate through a difficult process.
“We’ve had to make some very tough decisions along the way but we are now close to reaching the stable ground we need to rebuild what I still believe will be a very sound and respected rural services business.”
Hahaha.
"With the restructuring process now coming to an end, and several asset
realisations likely in the short term, the company will be in a different
position in December when I step down,"
Oh yes Rob, indeed it will! Does that position start with a B?
That was a real positive announcement
Rob has done a good job ... taking ALF from the verge of going under to something that now may, just may, have a life going forward
Current market cap of $51m without the hassles of ANF could make this a goer .... but nobody will ever think much positive about ALF
Rob is associated with the Hanover/ALF merger. He has to go so that the past is left behind.
That's probably right.
Previously I thought that the people with the real gripe in this were the original ALF shareholders (not me BTW), but I am beginning to think that ALF without Hanover would have been dead anyway, so they were kind of thrown a lifeline (albeit into a rather leaky liferaft, but possibly better than nothing).
If so, Alloway has perhaps done okay, but is definitely a strong link to the past.
Alan.
cue movie of crashing jet plane with pilot ejecting at the very last moment
Looks like $31.0m equity - or $44.5m prior to losing ANF. Debt about $73m. They say NTA 2.2cps, but taking into account ANF, bonus shares and 90m issued 4 Aug (presumably not cancelled ), I'd say 1.37cps.
Been a good trade for a few this week on Monday's announcement I would think. But difficult to see much value at current price unless they've impaired assets well beyond realistic prices.
Can't see any signs that Hanover assets went to ANF, so that is good. Net assets recovered are now allowed for at $94.3m and total assets acquired were offset by $45.9m of loans, so presumably they've allowed for $140.2m of total assets. Less $9.4m they say they've recovered and maybe allow to have spent the $7.5m of cash - so should be able to find at least $123.4m of ex-Hanover assets still on the books? About equivalent to the amount in Property Inventory, Property Investments and Loans & Advances remaining in ALF, so probably okay?
Lizard were you using the pro-forma numbers?
Total L: 112m
Total A: 143m
NTA: 29.785m or 1.51 cps on current 1.9b shares. (Have not added in the bonus securities)
Major assets
Loans: 43.6m
Invt - Prop: 38m
Invest Prop: 41.9m
Are these 3 all from Hanover?
They lost 10m last year if you take out impairments, and the 5.9m cost of Hanover.
Too biggest expenses are Cost of Goods sold, and salaries, who actually rates there services business and stores going forward? Are they competitive against the like of PGW, Bunnings, Farmlands etc?
Today is the last day it can file the audited accounts before facing suspension from the stock exchange.
It is interesting to see what's happening tomorrow.
I heard on last nights 1zb's business programme that Allied F had repayed its bank debt and can now go ahead with the capital raising via a cash issue, from what I understand its rural business is going well with a very loyal farmer base and if they can succefully recapitalise the company it should has some future.
Yep - They made a formal announcement to the NZX that the Westpac loan was fully paid off, and their overdraft facility is now only $250,000.
Also, they have re-negotiated the amounts owed to ANF (with the receivers of that company), so they won't be subject to an imminent call on those facilities.
Certainly looks like they are making good headway. I hate to say it, but I think the shares were potentially under valued at 1.6c yesterday, although I note that they are back up to 2c today. Just goes to show that I was wrong on the shares!
Alan.
The Hanover lot will be delighted to hear that Alan - only another 20cents to go before they're back to debt for equity swap priceQuote:
I think the shares were potentially under valued at 1.6c yesterday, although I note that they are back up to 2c today.
Alan.
Whoa there tiger - MY faith in the dynamic duo !!! Not here pal.
I was merely reflecting on how awful a mess this whole episode has become
where there is life there is hope I suppose Alan
There is always hope :-)
Looks like the loans acquired with the Hanover assets (that they failed to clearly mention in the paperwork to investors) are coming back to roost. Seems at least one $19m loan against Matarangi Beach is with HSBC and has been called in. Seems Matarangi was a net value $26m of the support package, last recognised at $7m net of debt and now likely to be somewhat less...
It seems to me that presenting the support package assets at net value as part of the deal without making clear those values included debt facilities and outlining the terms was misleading. Especially so in assembling a pro-forma balance sheet that simply showed the net value rather than asset/liability components that clearly had to be consolidated.
More evidence suggesting that Hanover debenture holders would likely have been better off under a liquidation.
No surprises there Lizard.Yes I think the Hanover debenture holders would have been better off under liguidation.The liguidator would have gone after the 'givers' of the 'support package'.May have even encuoraged the 'givers' to find their cheque books.!!! Now that would have been fun.
Some strong words in the latest ALF release as Matarangi Beach Estates goes into receivership. The blame game is probably of no help to former Hanover debenture holders - after all, it was ALF who issued the prospectus to them offering shares in ALF. And it is difficult to say that ALF has suffered from the transaction - even if it hasn't turned out to be the miracle outcome it was portrayed as. ALF has still managed to use proceeds realised from Hanover assets to pay down it's own pre-existing debt, while making sure that it's own pre-transaction shareholders had the protection of the shortfall calculation. There was no equivalent benefit for Hanover investors who, with the loss of ANF and other ALF-related write-downs, are probably in negative on what they received from ALF.
Quote:
Allied Farmers Limited Managing Director, Mr Rob Alloway said "it seems
obvious to us that the value of these assets in the audited 30 June 2009
financial statements, on which Hanover debenture holders were entitled to
rely at the time of acquisition, was unrealistic, as there is no way that the
market for this type of asset has deteriorated that much in such a short time
frame".
"This is an unfortunate trend we have seen with most of the property and loan
assets that were acquired, and further calls into question the real value of
the shareholder support package contributed by Messrs Hotchin and Watson at
the time of the Hanover moratorium. The investment community should have
expected far better oversight of the moratorium from Hanovers directors,
valuers, trustees and auditors".
Mr Alloway said "it is also disturbing to us that in the days leading up to
the receipt of the repayment demand from HSBC, we were, with the knowledge of
HSBC, approached by Mr Kerry Finnigan, representing an entity owned by Messrs
Hotchin and Watson, proposing a purchase of the MBEL assets for the loan
value of circa $19 million.
"Investors can draw their own conclusions as to whether it was a coincidence
that when we refused to sell the asset back to Hotchin and Watson, HSBC, who
in Mr Finnigan's own words have a "strong relationship" with Hotchin and
Watson entities (HSBC banks both Bendon and Cullen Investments), immediately
moved to demand repayment. The HSBC loan on MBEL we understand is also still
guaranteed by entities associated with Hotchin and Watson".
"The directors of MBEL will be keeping a close eye on any likely sales
process by the Receiver to ensure the best value is achieved for the asset
for the benefit of our shareholders. We would be disappointed if it turned
out that HSBC's demand for repayment was simply designed to enable the return
of the asset to Hotchin and Watson interests at a vast discount to the value
they transferred it to us in just November last year".
Good stuff eh!?
I just came across this excellent Dominion Post article by Tim Hunter (dated 13 August) that I hope they won't mind being copied here as it makes for a fairly good summary on the debt issues (though doesn't make clear that they remain non-recourse to ALF):
I doubt ALF was as naive about the valuations as they would like to appear - PWC cautioned on the valuations on pg 60 of their 2008 report at the time of the debt restructuring. Surely ALF's own due diligence would have established the loan situation. And, naturally, ALF were not willing to extend any additional security to the loan that might have enabled a re-financing of the loan, thereby avoiding receivership.Quote:
Allied Farmers moves deeper into repayment mire
BY TIM HUNTER - The Dominion Post
Last updated 10:08 13/08/2010
OPINION: As Allied Farmers twists and jerks on the gibbet of its desperate cash shortage, the figure of Mark Hotchin can be imagined watching from the front row, knitting.
Released from the onerous obligations of Hanover Finance when Allied bought its assets, he can afford to be a bystander, although one who knows more than most how long Allied can survive the noose without succour.
When defunct Hanover offered investors a moratorium deal in November 2008, Mr Hotchin made much of a shareholder support package in which he and business partner Eric Watson transferred property to Hanover and its sister United Finance. Those assets were worth $66 million, he said. Add in cash commitments and the pair were tipping $96m of their own into the pot for the benefit of investors owed more than $500m.
The real value of that property was queried at the time, but Allied is now discovering its inclusion in the deal was as supportive as throwing a drowning man a lead- filled lifejacket.
Why? Because the Hanover property came with debt that is eating up cash.
At the time of the moratorium, it took careful scrutiny of the scheme's documents to glean much information about the debt attached to the shareholder support. The properties transferred were in the Axis group of companies and comprised land and developments at Matarangi Beach Estates in the Coromandel, Clearwater Resort in Christchurch and Jacks Point in Queenstown.
They were collectively valued at $40m with a further $26m in a second-ranking loan to Matarangi Beach Estates. The $40m was a net figure, calculated by subtracting the debt owed on the properties from their apparent value, but how much debt was owed and to whom was not made clear.
When Allied bought the Hanover and United assets, the debt was thought so insignificant it barely warranted a mention in the offer documents. A table detailing what Allied was buying gave liabilities as zero, while assets were $396.2m, including the Axis companies as worth $34m.
It's likely many Hanover investors would have believed this was true - that only assets were being transferred and they had no residual liabilities to worry about.
But there was a hint of warning in a letter from Hanover chairman David Henry to investors last November. He said Allied could be a better prospect because it would have: "An ability to pay down the first mortgages over the Axis property assets transferred under the debt restructure support package, which otherwise cause increased pressure on cashflow and the realisation programme for these assets."
Investors should have already been aware the Axis properties could be worth nothing, but this was the first time they had been told the debts could be bleeding precious cash. Details of the debts were not provided by Hanover until it published its 2009 financial statements four months ago.
There was $21.2m owed to a bank by Matarangi Beach Estates, $11.4m owed to a bank by Lifestyles of New Zealand Queenstown and $4.4m owed to a bank by Clearwater Hotel. All the loans were in breach of their bank covenants, and since December, those debts are on Allied's balance sheet, not Hanover's - nor that of Messrs Hotchin and Watson. They make a big difference.
Allied has been struggling to renegotiate its debt to Westpac for $19.5m, a facility that was due for repayment in July but has been extended to next March on the understanding Allied will raise capital and restructure.
Its debt on the Hanover properties is much bigger at $30.8m. As of December, all of it was classed as due within one year. After yet another asset writedown it is apparent Allied is in no better position to pay down those first mortgages than Hanover was - or, presumably, Messrs Hotchin and Watson were before the moratorium deal.
"Thanks for nothing," Allied's shareholders might say. Click clack, say the knitting needles.
Probably for the best - though from ALF's point of view, perhaps it is okay to get another $7m written off the value of the Hanover assets rather than take any risk to preserve the value? The holders of the bonus shares (i.e. pre-transaction ALF holders) will get compensated via the shortfall calc anyway.
Taking MBEL as an example, I have no real issue with the disclosing it as an asset only (setting aside the actual valuation attributed which was recently $7m I think).
The debt within MBEL was and could never become a liability to ALF itself, and hence the minimum 'value' of MBEL to ALF was zero.
If they had disclosed it as, say, $26m of assets and $19m, then it would imply the maximum downside is $26m - that would have been misleading I think?
Alan.
Any positive implications for Allied Farmers?
http://www.stuff.co.nz/business/indu...h-Court-action
As for Hotchin saying that he is unaware what the hearing is about - he must be kidding, right?
belg. if someone was to buy the ailing alf or even merge, what wld that do for the sp. i was going to take a punt given i cant seem them just letting this sit there
Hi evilroyrule, did you end up taking a punt? It seems that very little is going on at the moment.
Does anybody have an idea of how a merger or t/o would affect the sp?
ha ha. it was my wishful thinking of a merger cum backdoor play. still light there, faintly. i will be back if i hear the drums beating my good friend percy. for now, the fat lady is warming up her tonsils....
did you like my word play?
With the possible t/o of Wrightsons there heaps of cockies who would not want to deal with them now ( assuming that Wrightsons dont have the cocky by the short hairs ) and to that end they might find ALF attractive as a store and agent, just my thoughts - for what their worth .
When will we hear the result of the court hearing between Allied Farmers and Hanover?
Hi digger. Apologies for my ignorance, I am fairly new to the game. Is the decision likely to be days or weeks?
Hi kanejones,
I would not have a clue was just trying to make a likely comment that will in the end probably be true. I would say weeks or months if money can be made out of draging it out. Usually the only way to hurry up a decision is when one side runs out of money. then the solictors lose interest.
A struggling half year report now out.
Probably this bit says it all:Quote:
Going concern and liquidity
The financial statements have been presented on the going concern basis. The cash flow forecasts of the Group indicate that in order for there to be a reasonable expectation that the Group have adequate resources to continue operations for the foreseeable future there will need to be:
• continued realisation of financial and property assets of Allied Farmers Investments Limited;
• agreement of arrangements with rural merchandise suppliers and other creditors;
• collection of the balance of the Allied Farmers Rural Limited revolving credit facilities;
• completion of a successful capital raising or other initiatives being pursued; and
• factoring of the rural services merchandise debtors with a financial institution.
The remaining capital figure is still (just) above the (nominal) value of the bonds so, theordetically, they are still worth 100c in the dollar:
ALF Financials to 31 Dec 2010
Further losses will impair that of course, but the bonds are currently trading at around 46c in the dollar, presumably with players factoring in further losses.
Alan.
The shareprice is starting to look pretty grim...
Yep - Trades at 1.5c now.
Bearing in mind too that those figures are 31 Dec 2010, so its quite possible that all of that remaining $12m of equity has been eroded by now.
To be honest, I'm not actually sure where the bonds are in line. They could very well rank ahead of any unsecured creditors at least, and possibly ahead of the IRD / employees etc which would make them much less exposed at this point than I was assuming, but I haven't ploughed through the accounts / notes to the accounts and / or the trust deed to find out.
Alan.
LOL!
Buying ALF010 has been high risk for well over a year now - they were always a 'punt'.
To be fair, they have always paid the interest on time as far as I recall, and depending on where you bought them, the returns have been good, so if you mentally subtract say, 10% interest, and regard the remainder of the interest as a return of capital, then your net cash investment is likely dropping off a bit.
Still, they are definitely a punt!
If they do convert to shares, in theory, would they become around something like 800m new shares at nominal value of the bonds, and 1.5c share price?
I am doing:
$12m bonds divided by $0.015 to get 800m shares?
If so, and the share price hits 1c then:
$12m / $0.01 = 1.2b new shares?
Just guessing!
Alan.
All these Finance companies appear to be having a race to see who can get to 0.001 first, ALF is in front, Geneva closing quickly and NZF not out of the picture, who will the winner be? Answer, not anyone that has shares in any of these entities !!
So hardly anybody left to do the hard work .... calling in contractors to help .... maybe the corporate undertakers would be a better bet
Betcha the tea lady has gone .... oops I forgot they couldn't afford one
What an utter disaster this whole fiasco has been
Any chance they'd get RECL in to manage the AFI assets?
I see the rural stores are gone. Is this the whole of the Rural Services segment of ALF? Would that mean the remaining business is now pretty much just the Asset Management business, or sell down of ex-Hanover assets?
If I was a shareholder, I would find today's announcement a little info-lite. Are they in quiet liquidation mode, and, if so, wouldn't this sale require shareholder approval under rule 9.1.1 (a)? I guess they can get away with not needing a vote under 9.1.1 (b) if the assets were sold for less than $10m?
Hard to see why anyone is paying more than NTA for shares (around 0.6cps) - I would have thought a discount would apply and a price of 0.4cps or below would be more fitting.
http://img.villagephotos.com/p/2006-...ingrule9_1.gif
Hard to see why anyone is paying more than NTA for shares (around 0.6cps)
not hard at all up to 1 on the news
Even taking the NTA at 0.6c a share seems a bit risky. NTA was 7c a year ago.... just keeps falling with the write downs on the hanover loans
dont have to justify market sets the price not downrampers or up rampers for that matter.
Oh, okay. I thought you were saying that the shares were worth 1cps (and not, say, 0.4cps) for a reason. But seems your reasoning is that you might as well buy them at 1cps because that is what the last person was prepared to pay? On that basis, I guess there is no financial reason to discuss the merits of any particular shares, since they would all be priced correctly. Buying decisions are purely whether or not to be in shares at all (and after that, whatever form of dart-throwing you prefer)?
Not sure what the downramping/up ramping refers to. That I am attempting to move the market?
There was only $4600 ALF traded today and it closed at 0.9c. So yeah I dont think there was much reaction to the news.
Fair enough comment - though trying to value ALF is a near impossible job when you have holders who probably still believe they can maximise their profits despite being done over by Hanover and ALF management. This will bring some unnatural distortions to the market and consequently any valuation. Its an irrational and illiquid stock and any investment is frought as a buyer is unlikely to have a decent exit strategy.
Yes, I can understand it is a share that people feel emotive about and am sympathetic. I didn't own Hanover or ANF debentures or ALF shares, but I had invested in them in the past and I did manage to get caught out on Strategic, St Laurence and Dorchester. Whether or not the Hanover-ALF deal was better or worse than alternatives (for either party) is speculation - rather like choosing which patch of quicksand would be better to stand on.
Where I was coming from is that it appears to me that (without saying so), they appear to be in a liquidation strategy. If that is the case, then usually the value is driven by NTA, less costs to liquidate. The only reason to move above that is if there is a reason to believe that the assets are under-valued on the books.
How do you turn $45.8m into sand? Answer. Buy a beach property from hanover and watch it morph.
ALF announce today MBEL likely to be written down to zero.
(I wonder what Hotchin and Watson offered to buy MBEL for? It might have realised ALF something rather than this loss and the $3m approx they have forked out in interest and costs)
This will be interesting... isn't it the closer the Hanover assets get to having been worth $0, the closer to infinite the number of ALF shares issued to the bonus share holders? Could see this turn into a scrap over the accounting. Wonder who holds most of the bonus shares? I think GPG sold out before allocation? Alloway?Quote:
REPORTING UPDATE
Allied Farmers Ltd (ALF) advises that it is in the process of completing its 2011 year end unaudited financial statements. These will be released on 29 August 2011. This process includes the receipt and review by the Board of independent valuations of the remaining loan and property assets acquired from Hanover Finance and United Finance in December 2009 (the “Acquisition”).
ALF is yet to receive all of the valuations, and nor has it made an assessment of the overall impact of these adjustment and some other positive adjustments. Accordingly, whilst it is likely that these valuations will result in further impairments of these assets, at this point in time ALF is not in a position to draw any conclusions as to the overall extent of the impact of these valuations.
The audit of the financial statements will be completed during the month of September, with final reporting due by 28 September 2011. Once the audited accounts are available, ALF will be able to calculate and announce the extent to which the Bonus Shares issued to those ALF shareholders immediately prior to the Acquisition will be converted into ordinary shares. Given the likely extent of the impairment of the acquired loans and property assets since Acquisition, the calculation is expected to result in a significant number of new shares being issued to those shareholders.
When that conversion calculation is completed, ALF will be able to calculate and announce (at the same time) the number of additional shares required to be issued to institutional and professional investors who participated in the share placement on 3 August 2010. Again, this is likely to result in a significant number of new shares being issued to these institutional and professional investors.
But hey, institutional investors who got the placement in Aug 2010 get some too... there's a price adjustment to their shares AFTER the bonus share holders have got their lot... funny, but I don't see any mention of that in the NZX announcement at the time and I'm not sure if they told the ALF holders when they offered them the rights issue.
Then again, perhaps everyone will agree by then that the infinity shares are worthless...:eek2:
Actually, just looking at the companies office, it is possible they were still in... although there were reports of them selling out in the days before the transaction, it is possible they were still shown as the registered holders. Ithaca share parcel is shown as removed on the 24th Dec and bonus shares were issued 21st. Hard to call, as I'm not certain that Companies office dates will match the registry.
But it is the Price Adjustment Ratio on the $2.25m of placement at August that might be the real killer. From page 9 of the interim report:
These placement shares were issued before the ANF receivership. Already by the end of December, NTA had fallen to about 0.63 cps. Take into account the issue of bonus shares and a probable further fall in the value of the Hanover assets, as well as possible sale below book value of the merchandising arm, and it might be possible that NTA ends up only a little above the 0.2cps. Subtract 0.2cps from that and it is even more likely we get close to a 0c issue price for the institutional investors.Quote:
Issue of Shares 3 August 2010
On 3 August 2010 Allied Farmers Limited issued 90,000,000 shares to institutional and professional investors at a subscription price of 2.5 cents per shar, $2,250,000 of proceeds were received. These investors also received a price adjustment right (“PAR”) to receive an additional number of shares in the company if the audited financial statements of the Group for the year ended 30 June 2011 establish that the net tangible asset backing (NTA) per share is less than 2.5 cents, after adjusting for the shares to be issued under the bonus securities issued in relation to the Hanover transaction. In the event that the NTA is less than 2.5 cents per share, each investor wil receive that number of additional new shares which, when added to the number of shares issued on 3 August 2010 is equal to the number of shares that they would have received if the subscription price per share had been equal to the NTA per share as at 30 June 2011 less 0.2 cents.
This deal really bothers me. If we go back to the NTA at the time the placement, although the announcement was that investors would get 90m shares for putting in $2.25m at 2.5cps, it looks to me like the NTA was already less than 1.5cps at time of issue. Therefore, it seemed highly likely that investors would be allocated more shares under the PAR. Were existing holders made aware of this provision or given the opportunity to ratify? I can no longer access the meeting forms to know if there was a ratification vote with explanatory notes. The proposed rights issue to shareholders was cancelled and does not appear to have associated documentation issued - which is the other place this might have surfaced if shareholders were to have been offered the shares under the same terms (as implied by the notes to the interim report).
So potentially, a substantial portion of the company could now be allocated to professional and institutional investors who took part in a relatively small placement. Surely this has to run foul of something or other in the Corporations Act or the NZX listing rules... especially if shareholders were not given the chance to ratify (unclear to me at the moment)?
Actually, it doesn't look so much like the former ALF holders that are going to get the most now, but those who got the placement last August!!
Looks more and more like the Hanover assets had more value than ALF did pre-merger and yet ALF has protected every other stakeholders interests more than it has the bulk of its current shareholders (i.e. Hanover investors).
Oh, come on... can't let this thread be buried... doesn't anyone else have a bit of outrage to vent?
By my (probably dodgy) calcs, they only need to write off another $7.4m of tangible assets and the placement holders get infinity shares... oh and then in November, apparently the ALF010 get to convert at a 5% discount to the approx 0cps share price that will probably equate at that time... so really this farce is just getting sillier.
Lets just open the floodgates and let every placement have a hidden PAR. That way we can all keep guessing as to how many shares are actually being issued.
[insert=PMT image]http://www.aussiestockforums.com/for...milies/ald.gif[/insert]
Haha. I bet if I give you the Special shares they will still turn out to be Upwardly Challenged.* http://www.aussiestockforums.com/for...lies/pesok.gif
*On a roll with the smilies today!
So confirmed that nta for ALF is now negative.
Anyone else want to double check the calc?
Perhaps they have another out clause buried in the PAR agreement somewhere??? Otherwise, surely they would feel compelled to bring this issue more directly to the attention of the market?Quote:
These investors also received a Price Adjustment Right ("PAR") to receive an additional number of shares in the company if the audited financial statements of the Group for the year ended 30 June 2011 establish that the net tangible asset backing (NTA) per share is less than 2.5cps after adjusting for the shares to be issued under the bonus securities issued in relation to the Hanover transaction. In the event that the NTA is less than 2.5cps, each investor will receive that number of additional new shares which, when added to the number of shares issued on 3 August 2010, is equal to the number of shares that they would have received if the subscription price per share had been equal to the NTA per share as at 30 June 2011 less 0.2cps.
In announcing the results the Board says This increase in shareholders’ funds is intended to preserve the Net Tangible Assets per share on issue."
I think you are doing a good job there - but its all such a moving target. We have a $43m loss, revenue down 45%, hanover assets down to $93m from $500m, cash on hand down to $137k.
I can't help but feel that no matter what number you come up with the ultimate value of each share will be nil. SP hit a low of $0.005 today
Yes, I know you are right Minimoke and it is just a matter of time as to who ends up splitting the remains.
ALF has had plenty to say about the decline in the value of the Hanover assets, but even so they still recognise a value of $93m from Hanover. Perhaps they need to explain more clearly to the former Hanover debenture holders where this gift went, since there is no equity left in ALF. (i.e. that it went to ALF's bankers and ANF receivers/creditors?).
At the time of the Hanover debenture holders decision, it was hard to know whether they would be better off with liquidation or ALF. Now the jury is in, it is clear that they could not have been worse off with liquidation. A lesson to remember.
Can't agree with you there. I think they answer was clear and it was to not go with ALF. At the time I was propping up Hanover and SCF divestors and given I was propping them up I felt entitled to advise them against going down the ALF route. They knew best - thinking they would do much better under ALFs management's and they had a glint of gold in their eyes. Since then I've withdrawn the majority of my financial support since there is no helping some people - especially if it is with my cash and I've seen the remants of their initial investment shredded even further. I'm kinda well over it now but nothing gets my ire up more than when I hear financial commentators looking forward to the next IPO for "Mom and pop" investors (aka Trademe) - I just think there is another set of lambs being readied for slaughter. (Not that I'm suggesting Trade me will be a rort - its just the sentiment of these numpty folks who will just throw their money at anything that sounds like a good idea without doing their home work)
Yep, it was an easy sell for the Hanover boys, there was a ray of hope going down the ALF route. Remember how close ALF got to being in the NZX50!
Looks like ALF shares just as toilet rolls:)
Stock Exchange announcement today:
ALF
01/09/2011 11:57
MEETING
REL: 1157 HRS Allied Farmers Limited
MEETING: ALF: Annual Meeting and Director Nomination Dates
1 September 2011
ANNUAL MEETING AND DIRECTOR NOMINATION DATES
Allied Farmers Limited (ALF) is confident it will still be around in two months and consequently it advises that its annual meeting is to be held in Hawera at the TSB Hub, on Tuesday 29 November 2011 from 9.00am. Parking is available in the adjacent A&P Showground’s. Please tie dogs to the back of the ute. Zimmer frames may be stored in the cloakroom
Shareholders attending will receive a special dividend. This year it is a “Bring-a-plate” courtesy of the Taranaki Country Womens League. Holders are asked to limit themselves to one tea bag which will be available on request at the hot water urn.
For the purposes of NZSX Listing Rule 3.3.5, ALF advises that the opening date for nominations for directors to be voted on at this year's annual meeting is today and the closing date is 29 September 2011. All nominations must be received by 4.00pm on the closing date.
Nominations may only be made by a shareholder entitled to attend and vote at the annual meeting, and must be accompanied by the consent in writing of the nominated person.
Please send nominations, along with a précis of how the nominee will add value to the Board (preference will be given to any interior decorator with skills in wall paper hanging – holders will need to do something with their script) to:
Company Secretary
Allied Farmers Limited
PO Box 1888
Auckland 1140
End CA:00213252 For:ALF Type:MEETING Time:2011-09-01 11:57:13
This notice will be updated and readers should read at their own risk. ALF take no responsibility for any loss associated with this notice nor their decision to lead holders into Hanover investments.
Lol :-)
.......
Oh god, please put holders out of their misery. Down to 0.03 now. Waterboarding isn't allowed nor should such a painfully slow death be acceptable.
Note to Direct Brokng: Can you please look at adding an extra decimal to the buy sell prices.
Now we are heading to <$0.01 what do we call something worse than a penny dreadful?
The answer is to do what Savoy Equities did a number of years ago. Trading at $0.001, they did a share consolidation. For one brief second, SVY were listed at $0.40. Then reality bit, and the price is now back down to $0.001.
Suspect that something similar may happen to ALF. It would look good to see the price go from $0.004 to $0.45 ! ! !
Perhaps NZX should do something about these shares trading for fractions of a cent. It can't be a good look for our exchange in general.
Perhaps NZX should do something about these shares trading for fractions of a cent. It can't be a good look for our exchange in general. And ALF is about to have a major dilution!