Allied Nationwide crumbles into receivers' arms

The unit of Allied Farmers has asked trustee NZ Guardian Trust to appoint receivers after running out of time to remedy a breach in its Trust Deed ratio. It had until 5 pm today to save itself. It has about $130 million owed to about 4,500 depositors.

"The Crown stands fully behind its guarantee commitments and we expect an orderly process of payment to eligible Allied Nationwide Finance depositors," said Treasury deputy secretary, financial operations Philip Combes, in a statement. It may take 2-3 months to verify who is owed what, he said.

Guardian Trust has appointed Kerryn Downey and Andrew Grenfell of McGrathNicol as receivers. The advisory firm has been working for Guardian Trust and wrote the report that resulted in the trustee alleging the breach, Allied Nationwide said in its statement.

Allied Nationwide said it expects "an acceptable outcome" from the receivership because of the current net asset position and shareholder funds. It had tried to find ways to placate Guardian Trust but had been unsuccessful.