The beleaguered Allied Farmers Ltd. is reported to be in talks with the trustee of its finance unit Allied Nationwide Finance, concerning a disputed violation of its financial ratios.
Allied Farmers Limited, a New Zealand rural services and financial group, informed its investors that the Company plans on raising a capital of around $19.3 million, in order to boost the Company's financial position and to repay its debt for Westpac Bank.
Last year, the Allied Farmers had purchased a Five Mile property close to Queenstown Airport. Recently, the firm verified the sale of this property, which it had got with the purchase of Hanover Finance.
Rob Alloway, the Managing Director of the firm, revealed that the buyer does not want his identity to be disclosed.
Allied Farmers has received some break from its banker, Westpac, which will expand the company's banking facility, until late September.
The bothered finance and rural services company's loan and overdraft facilities with Westpac ran out on Thursday.
The company says that discussion between it, Westpac and another lender are in process; with Westpac also bearing in mind, a number of debt retirement and restructuring proposals.
Allied Farmers last year acquired the Hanover and United loan books in a swap of debt for equity. However, recently it has blamed Hanover Finance for infringing their contract.
Allied Farmers are seeking a legal recourse against Hanover Finance, which has been an unsuccessful venture of Mark Hotchin and Eric Watson.
Allied Farmers has confirmed its negotiations with Westpac New Zealand and one other lender. Allied Farmers has also said that the negotiations are about getting the bank facility extended. The previous agreement between, Allied Farmers and Westpac is expiring on July 1.
The Company had taken the control over Hanover Finance and United Finance assets in the last year.