15 Nov 2010

Allied Farmers shares fall on loan news

7:28 am on 15 November 2010

Shares in Allied Farmers slipped more than 4% on Friday after the troubled rural services firm announced one if its property developments is being forced to repay a $19 million loan to HSBC.

Allied Farmers acquired Matarangi Beach Estates when it bought the assets of Hanover and United Finance late last year.

Allied Farmers' managing director Rob Alloway says while HSBC's action is disappointing, the development has always been one of the portfolio's difficult assets.

Mr Alloway says a recent campaign to sell the entire development wasn't successful, but it will try again to sell it.

He says the development was worth $7 million at the end of June, but a further fall in value is likely.

Shares in Allied Farmers fell a tenth of a cent to 2.2 cents on Friday.