The woes of Allied Farmers continue, with the company announcing a further writedown in the value of assets acquired from the Hanover group of finance companies.

Allied now puts the loanbook’s worth at $94.3, an $81m drop on its last valuation and less than a quarter of what it paid for Hanover’s debt in December.

Allied shares shed a third of their value at the news, and on Friday morning were trading at 2.5c.

Business commentator Brian Gaynor says company bosses know what needs to be done, making it happen will be the tricky part.

“We know what Allied Farmers’ position is, it’s not great. All these guys are saying is you’ve got to get these things fixed, which is what they have to do.”

And the bad news doesn’t end there for the beleaguered rural services company.

Ratings agency Standard & Poors has cut the credit rating of its finance arm – Allied Nationwide Finance (ANF) – from B to CC.

Standard and Poors credit analyst Peter Sikora says trustee Guardian Trust’s belief Allied Nationwide is in breach of its trust deed puts further liquidity pressure on the company.

“If you look at what’s maturing in terms of debenture, in terms of the cash that they’re holding, there is a shortfall which at this stage is set to be met by scheduled loan repayments," Mr Sikora said.

"That’s a tenuous position from a credit rating perspective, what we’ve seen in New Zealand lately is that there’s been regular delay from scheduled loan repayments for various reasons.”

But Mr Sikora says ANF could turn the markdown around by winning back Guardian's confidence.

“The rating could stabilise, and the credit watch that we have on it could be reviewed, if the company is successful in managing its position during the next few months

"The most critical part of that is getting that prospectus back in the market – they’re targeting to do that in the next 10 days or so.”