Allied Farmers Limited received advice on Saturday morning that it had been awarded a further interim distribution of approximately NZ$3.5 million relating to a luxury development in Beverley Hills, California, known as the Maison Reeves Condominiums. This development was financed in part by Hanover and has been in receivership for a considerable period of time. This is the second distribution from this receivership, having previously received more than NZ$6 million in June 2010.

The judgment, entered by a California court, granted the receiver permission to make a further interim distribution to Allied Farmers, of which the net return to Allied Farmers is likely to be approximately $3.5 million. There were no objectors to the interim award. Allied Farmers expects to receive this second distribution this week.

In addition, depending on the actual sales prices of the final two unsold condominiums (one of which is currently in a sale process), the Californian receiver is likely to be able to apply to the court within the next few months for a motion to make an approximately NZ$7 million final distribution to Allied Farmers.

Allied Farmers also advises that as part of its ongoing obligations, it has kept all stakeholders, including Trustees Executors Limited (which acts as trustee for the company's Capital Notes), informed about these matters and the general position regarding the Group, including the ongoing position under the Westpac banking facilities. Allied Farmers has delayed the preliminary announcement of its financial results to 30 June 2010 given the need for Allied Farmers to consider those matters and the financial reporting impact of the receivership of Allied Nationwide Finance.

While Allied Farmers expects to report that it remains in compliance with its covenants in respect of the Capital Notes, Trustees Executors has an ongoing obligation to consider and report on the financial position of Allied Farmers generally, and has made Allied Farmers aware that it has written to the Companies Office in relation to the financial state of Allied Farmers.

Given the work being undertaken on its accounts and also given that a number of proposed actions are incomplete and subject to commercial sensitivities, and therefore are not capable of general disclosure, the position is that not all stakeholders can be fully up to date with developments at all times, and Trustees Executors' action therefore necessarily occurred without it being aware of the latest information or developments.

Allied Farmers will seek to brief relevant stakeholders, including Trustees Executors and the Companies Office on the state of various initiatives, including the impending receipt of the Maison Reeves funds and other positive news expected shortly. Allied Farmers is confident that these initiatives, and an appropriate briefing will assist in clarifying the state of Allied Farmers' financial position.

Managing Director Mr Alloway said "We are making solid progress in addressing our financial position and we will give a further update, including some likely further positive developments when we release our preliminary accounts later this week."