TIM HUNTER

The sale of a 22-metre luxury motor launch for a sixth of its alleged value has cast doubt on other asset values reported by failed finance company Allied Nationwide.

The vessel, Absolute, was recently sold by the receivers for $220,000, after having been listed in January last year as worth $1.3 million.

Marine broker Neil Gurran, who was appointed by Allied Nationwide to sell Absolute last January, said the company had insisted it listed for $1.3m despite being told it was worth less than half that sum.

“They said it had to be listed at $1.3m,” Mr Gurran said. “When I rang them and asked, they said, `You just have to understand that is what we have to have it at. Bring us any offers you get.’ I said it’s pretty hard when the boat’s probably only worth $300,000, because it needs a lot of work.”

Allied Nationwide went into into receivership in August. Taxpayers have forked out around $130m to pay 4500 of Allied’s secured debenture holders, who were covered by the retail deposit guarantee scheme. Perpetual bond holders, owed $15.5m, were not covered.

Mr Gurran said the receivers were so desperate to raise cash they had spurned a written offer from a customer willing to pay $250,000 cash, or up to $332,500 if repairs were done to Absolute. Instead, the receivers had accepted just $220,000 through another broker.

“I think it’s disgraceful,” he said. “They burned $100,000.”

Rob Alloway, chief executive of the finance company’s parent, Allied Farmers, said the huge discount showed that Allied Nationwide had an unrealistic view of asset values.

Although Mr Alloway was not involved directly in the finance company’s affairs, “it did form an important part of the assets of Allied Farmers and, consequently, from time to time I would cast my eye over assets”.

The Absolute was just one example of assets held at excessive valuations.

In response to Mr Gurran’s concerns about the sale, receiver Andrew Grenfell of McGrathNicol said he was confident the deal had been the best available.

“The receivers accepted an offer via Gulf Group Marine Brokers. However, it became a protracted and difficult negotiation in which the broker Neil Gurran’s client breached the terms and conditions of the sale.

“The receivers were subsequently presented with alternative offers. After considering the offers and providing Neil Gurran’s client a seven-day period to complete the sale, which he failed to do, the receivers accepted the best alternative deal.

The alternative deal accepted was an unconditional, `as is where is’, cash offer.”

– BusinessDay.co.nz

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