Allied Farmers expects further write-downs in the value of its assets of its own Allied Nationwide Finance company, suggesting that this time some of the impaired assets are its own.
The company announced in a statement that it had been awarded more than $6 million after a long-running legal dispute with Pacific Northstar Property Group, headed by developer Mark Cooper.
However, at the bottom of the same release was news it was performing an annual detailed review of the carrying value of its finance subsidiary, Allied Nationwide.
Craigs Investment Partners broker Chris Timms said that was the most important news in the announcement and probably warranted its own announcement.
He believed the announcement meant Allied Nationwide's own assets were suffering through both a loss in market value and that people were not meeting their loan commitments.
"Getting $6 million back is good news but the further write-downs detract from that," he said.
Allied Farmers bought $396.2 million of Hanover Finance and United Finance assets last year and had so far written them down to $124 million.
Further write-downs would be included in the full-year accounts, the company said.
Allied managing director Rob Alloway said the $6 million awarded related to a luxury development in Beverley Hills known as the Reeves Maison Condominiums, which were financed in part by Hanover.
The receiver also held other funds of $3.5 million in trust which was forecast to increase by up to $13.5 million as the remaining condominiums were sold.
"While there remain objectors to the distribution of the remaining funds, given the success in this judgement and the difficult position it creates for those objectors, the company is confident of further distributions in due course."
Last week, Allied said it had agreed to sell the second stage of the Five Mile development, near Queenstown.
