Hanover investors accept Allied offer 

Source: ONE NewsHanover Finance

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Allied Farmers has narrowly secured the 75% support of Hanover Finance investors to take over the failing finance company's assets.

Allied Farmers needed 75% of all four investor groups to support its offer of shares in the company for the deal to proceed and the largest group, Hanover secured debenture holders, backed it by a very small percentage.

Of the 277,093,623 votes, 75.45% gave it their support, overriding those who argued vigorously at a meeting in Ellerslie on Wednesday that receivership was a better option.

Allied Farmers had offered shares which would add up to 78c for every $1 invested by Hanover secured debenture holders, 8c more than they were told to expect under the Hanover debt restructure plan (DRP).

United Finance investors notched up 79.48% support for a deal which gave them 90c in shares for every $1, the same as predicted in the DRP.

Hanover subordinated noteholders gave 97.47% support and Hanover bondholders 88.33% support. Both groups stood to get no return under the DRP but were offered 30c per $1 invested.

Hanover director Des Hammond says he is delighted investors had supported the proposal.

"It's a substantial majority, 75 percent," he says.

"I think the investors have considered it carefully, it was their vote, they've made their decision and the transaction will now give them a new opportunity."

Allied Farmers managing director Rob Alloway says he is delighted with the decision but aware of the challenge his company faces.

"To be honest I worry more about what we buy than what we don't buy and I'm a lot more worried now than I was before the vote to be honest. We have a very long, hard road ahead of us to fulfil all the promises we've made to investors and we've pledged to those investors to do our very, very best," he says.

"I'm very confident in the future of our finance business. We've been around for 30 years now, it's been through perhaps the toughest time that the finance industry's ever seen in the world and this only serves to strengthen it further."

Hanover principal Mark Hotchin says the deal is the best opportunity for investors.

He says there has been a lot of misinformation about the deal and about his role but he is glad emotion didn't cloud the thoughts of too many investors.

"I think some did, but ultimately the logic of the deal I think stood out and it's a better platform, it's a better way forward and I think the mums and dads will be better off for it."

Many of Hanover's elderly investors told Wednesday's meeting they would have preferred the company to go into receivership as the best way to get money back as they were fearful of Allied Farmers shares plummeting.

But Hotchin says this deal still gave them the option of having shares they could cash in now rather than at a later date.

"I think it's reasonably obvious there will be an overhang in the market.  I think everybody's expecting some short term dip and hopefully some medium term stability, and if Rob does the job we think he will hopefully there'll be some growth.

"One of the advantages of this proposal and now deal from Allied is that it gives them flexibility, so for those that absolutely need to they can sell some stock where they couldn't before."

Allied Farmers hopes the new shares will be issued on Friday and it will make an announcement about when shares can be traded once that date is confirmed.

A trading halt on Allied Farmers shares was extended pending an announcement, expected prior to the market opening tomorrow, from Allied Farmers on the nature of remaining conditions on the deal.