UPDATE 1-Allco expects over A$1.5 bln loss in fiscal 2008

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SYDNEY, May 1 (Reuters) - Australian investment group Allco Finance Ltd (AFG.AX: Quote, Profile, Research, Stock Buzz) said it faced a loss in excess of A$1.5 billion ($1.4 billion) in fiscal 2008 due to writedowns, impairments, cheap asset sales and restructuring costs. The group, whose share price collapsed in January as it struggled to refinance short-term debt, also said it had reached an agreement with financiers to extend the maturity of a A$250 million loan facility to May 30 from May 1.

The bridge facility gives it time to continue talks with its bankers to restructure all of its remaining A$947 million in senior debt.

As part of the talks, Allco has told the banks it aims to sell assets to help reduce senior debt to A$400 million by September 2009.

The group payed down A$67.5 million of debt on Wednesday with funds from asset sales and is due to repay more by May 30.

It said terms of any new debt facility were likely to impose higher interest costs and tighter operating conditions than under existing terms, but it warned there were no guarantees that negotiations would be successful.

"Given Allco's focus on preserving capital and liquidity and significantly reducing its borrowings, Allco does not envisage paying a dividend in the foreseeable future," it said.

It said it was reviewing appropriate carrying values for its assets, including A$1.3 billion of goodwill and A$176 million in intangible management rights on its books, which it said "had suffered material impairment".

As a result it said it may report a loss of more than A$1.5 billion for the year to June 30, 2008.