Friday, March 29, 2024

ALF not expecting fast windfall

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There is a long way to go before a potential financial windfall for Allied Farmers is realised, chairman Garry Bluett says.
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The listed livestock services agency had been told it might be in for a gain of more than $500,000 on a loan asset it sold for $100,000 about four years ago.

The return might come from legal action by the liquidator of the Property Ventures business and its subsidiaries against the company directors and auditors.

That action was being paid for by specialist litigation funder SPF Group, which had bought the loan from ALF.

The loan helped fund a real estate development in Queenstown but was never repaid. It dated from ALF’s failed investment in United Finance companies years ago.

In a release to the NZX Bluett said the liquidator reported the action was progressing well and if successful the final amount would be higher than the level predicted in 2013.

ALF sold the loan for $100,000 cash, with the prospect of up to a further $500,000 depending on outcomes. If the action was successful, ALF had now been told it might now be entitled to a share of net proceeds, of a “substantially greater amount” than $500,000.

A return was not expected this financial year, ending June 30.

“It could play out but we’re being guided by what other people tell us,” Bluett told Farmers Weekly.

“We didn’t think it was possible but they’ve won a couple of court cases and we understand there’s a court case for the main part early next year.”

Bluett expected appeals to be lodged whichever way the court case went, which was why he did not expect an early return.

ALF sold other loans from its finance portfolio but the property ventures case was the only one Bluett knew of that was being pursued.

ALF also told the NZX that director Mark Benseman’s Albany Braithwaite firm had bought more shares and now owned 12.48% of the company.

That was just higher than the 12% stake owned by Stockmans, the stock agent team involved in the ALF group’s NZ Farmers Livestock business.

NZFL was tracking along well towards the end of the June 30 financial year, Bluett said.

A significant part of its earnings came from dairy herd sales finalising at the industry’s May 31 season’s end.

The business was trading significantly ahead of last year and new dairy herd business was still coming in.

Bluett confirmed the group still expected to claw back the shortfall of earnings in the six months ended December 31. First half after-tax earnings were $480,000, down from $620,000 at the same time a year earlier.

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