Shares in Allied Farmers lost more than 70% of their nominal value on Wednesday after the company issued more shares, then consolidated its shareholdings.
Stock in the rural services company has tumbled and its loanbook has lost three-quarters of its value since it bought Hanover and United Finance's assets for $396 million in December 2009.
As part of the purchase, Allied Farmers agreed to a bonus share reset mechanism to protect its own shareholders if the assets fell below a certain value.
It's also had to issue 977 million shares to institutional investors who took part in a share placement in August 2010.
The extra shares meant the company had more than 9 billion shares on issue, so on Wednesday it also conducted a 1-for-100 share consolidation, bringing the total number of shares on issue to 90.8 million.
After a trading halt was lifted, Allied Farmers' shares fell 14.5 cents to 5.5 cents.
While the share consolidation reduced the number of shares owned by shareholders, it did not affect the relative percentage shareholdings in the company.
