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ALF
09/09/2013 09:30
GENERAL
REL: 0930 HRS Allied Farmers Limited
GENERAL: ALF: Bond Issue
9 September 2013
BOND ISSUE
Allied Farmers Limited (ALF) advises that its wholly owned subsidiary, Allied
Farmers Rural Limited ("AFRL") is proposing to undertake a bond issue on the
terms described below ("Bond Issue"). Some of the proceeds of the Bond Issue
will be used, together with proceeds of a draw down of funds from an existing
funding facility with its secured lender, Crown Asset Management Limited
("CAML"), to fund the initial instalment of a proposed repayment plan with
Inland Revenue that remains subject of negotiations ("Repayment Proposal").
The balance of the proceeds will be used for working capital purposes. If
AFRL and Inland Revenue agree the Repayment Proposal, the Inland Revenue
liquidation hearing will be discontinued. The Repayment Proposal (if agreed)
and the Bond Issue are cross conditional.
On 23 August 2013 ALF announced that negotiations are continuing, and the
Board said it remained hopeful of agreeing a proposal to satisfy a creditor
that had served a statutory demand for an outstanding obligation plus
interest thereon (being a total of $540,000) (the "Creditor"). ALF advises
that this remains the case, and that the settlement proposal with the
Creditor is conditional on AFRL agreeing the Repayment Proposal with the
Inland Revenue.
The terms of the proposed Bond issue are:
- 500,000 (minimum) and 1,000,000 maximum second ranking (behind CAML) Bonds
at issue price of $1.00 per Bond;
- Conditional on: obtaining an NZX Regulation waiver; raising the minimum
capital; agreement for the Repayment Plan with Inland Revenue; and agreement
of settlement with the Creditor;
- Repayable 31 August 2014;
- 12 percent interest rate, payable quarterly;
- Security - Guarantee from and second ranking (behind CAML) general security
interest over the assets of ALF and its subsidiaries other than New Zealand
Farmers Livestock Limited ("NZFL") and its subsidiaries; second ranking
specific security interest over AFR's shares in NZFL;
- On allotment of the Bonds each subscriber will be provided with 58 share
options issued by ALF to acquire ordinary shares in ALF ('Options') for every
10 Bonds held (or part thereof).
- the Options grant the Bondholder the right, upon exercise, to purchase the
number of shares of ALF as calculated above at an exercise price per ordinary
share equal to the volume weighted average market price of ALF's ordinary
shares, as quoted by NZX Limited, over the 20 Business Days prior to the
earlier of the date the issue of Options is made or publicly announced.
- Expiry Date of Options - 5 years.
Garry Bluett
Chairman
End CA:00240873 For:ALF Type:GENERAL Time:2013-09-09 09:30:49
