Allied Farmers Ltd has again downgraded the value of assets acquired from Hanover Finance and United Finance last year and is still counting.
Allied Farmers described the purchase of $396.2 million worth of assets last year as bold and a way of propelling the company forward. It said today that the assets are now worth $124m.
By March 1 the value of the assets had dropped to $175.5m and by May 7 to $106.6m.
Allied Farmers said today that as part of the process for the preparation of the annual result to June 30 it has assessed $69.1m, or 65 percent, of the $106.6m of loans and a further impairment of $33.6m is required on the $69.1m of loans assessed to date.
"Assessment work is under way on the remaining $37.5m balance of the acquired loan assets not yet assessed.
"However, we are unable at this stage to determine the extent of the impairment on these loans until we have received further information, such as updated independent valuations on underlying property securities."
The company cited a range of factors for the ongoing devaluation, including a tightening of funding for developments, lengthening of realisation periods due to longer rezoning processes and delays, lower valuations of Auckland apartments and the bankruptcy or liquidation of borrowers.
The result of assessment work to date suggested a further impairment provision of $51.5m would be required.
"These impairment provisions are subject to further adjustments arising from completion of the work on the remaining $37.5m balance of the acquired loan assets, and audit verification."
Allied Farmers shares fell 0.5c to 5.9c today.
