Allied Farmers had set a record date for a $19.3 million partially underwritten capital raising by today but decided to delay that for a short time while Allied Nationwide Finance provided reassurance to satisfy the concerns of its trustee.
"Our preference is for the prospectus to disclose the very latest information and with our trustee having questions over our finance subsidiary, we feel it prudent to delay the prospectus," chairman John Loughlin said.
"We believe the trustee's concerns can be resolved quickly."
Forsyth Barr broker Peter Young said Allied obviously want to ensure the latest information was available in the prospectus and with new information being released yesterday, the company had no option but to delay the capital raising.
The issue in regard to Nationwide Finance was its future liquidity position and how it would be funded after the Government's guarantee expired on October 11.
Nationwide Finance had not yet been accepted into the scheme, he said.
It had to rely on either being accepted for the extended scheme, thereby reassuring its investors their money was safe until December, 2011, or it could have problems securing reinvestment if it failed to get accepted, he said.
Mr Loughlin said the finance business had been self funding for the past three years.
While the audit was yet to be signed off, the numbers showed that continued to be the case.
"We are confident we will continue to have or obtain sufficient funds necessary to pay back debenture holders.
It's important to remember that we continue to pay debenture holders on time and that remains our focus."
The capital rasing was expected to go ahead as planned when the company had resolved the trustee's concerns, he said.
Discussions continued with underwriters McDouall Stuart Group in relation to the temporary delay.
"I'm reluctant to put any timeframe on when we will progress the capital raising but I'm expecting just a short delay," Mr Loughlin said.
