4 Aug 2011

Allied Farmers sells stores to repay debt

8:03 am on 4 August 2011

Rural services company Allied Farmers will continue to repay debt as quickly as possible after selling most of its retail stores.

The Fonterra-owned RD1 will buy seven of Allied Farmers stores for an undisclosed amount and will also take over the lease of another shop. The purchase of the Allied Farmers' stores will expand RD1's store numbers to 64 and increase its presence in Taranaki.

Allied Farmers shares shot up more than 29% to 0.9 cents on news of the sale.

Allied Farmers says it has repaid $50 million in the year to June and the money from the sale will be used to speed up its debt reduction plans.

Allied Farmers Rural's chief executive Steve Morrison says it will now concentrate on its livestock and real estate businesses.