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ALF
11/02/2013 12:19
GENERAL
REL: 1219 HRS Allied Farmers Limited
GENERAL: ALF: Loan Enforcement
[email protected]
11 February 2013
Loan Enforcement
On 8 October 2012 Allied Farmers Limited (ALF) announced that it had received
a request for payment of a $500,000 loan due ("the Loan"). The Loan had been
scheduled to be repaid to the Lender from the proceeds of an underlying asset
due to ALF in November 2012 ("the Underlying Asset Proceeds").
As stated in the 8 October 2012 announcement, Allied requested an extension
of time from the Lender to coincide with the receipt of the Underlying Asset
Proceeds. Despite the Lender being advised that the Underlying Asset Proceeds
had not been received in November 2012, the request for an extension has
continued to be discussed with the Lender since 8 October 2012, and ALF and
the Lender have being working co-operatively in an attempt to reach a
conclusion that is sensible for both ALF and the Lender.
However, the Lender has advised that it will today serve on ALF and its
wholly owned subsidiary, Allied Farmers Investments Limited, a statutory
demand for payment of the Loan plus interest (being a total of $540,000), and
has said it is unwilling to delay further in enforcing its rights to
repayment of the Loan.
ALF is very surprised by the action of the Lender given that ALF has been
working co-operatively with the Lender on a sensible timeline for repayment,
and given that ALF has a first ranking secured lender.
The receipt of the statutory demand is an enforceable event of default under
ALF's secured loan facility. ALF's secured lender has indicated that it
reserves its rights in that regard. The statutory demand requires payment
within 15 working days. ALF would be unable to meet that obligation without
the support of its secured lender, who at this stage has not indicated its
position.
ALF has been seeking information and assessing the position of a number of
parties to determine the value of the Underlying Asset for the purpose of
ALF's half year financial statements. Whilst there is some way to go in this
process and the Board has insufficient information with which to form a
decision, it is likely that partly as a result of this potential action by
the Lender the position of a number of parties may change, and the Underlying
Asset may need to be substantially if not completely written down. The
carrying value of the Underlying Asset is $3.75 million.
End CA:00232797 For:ALF Type:GENERAL Time:2013-02-11 12:19:11
