Allied Farmers Proposal to Hanover Finance

Wednesday 18 November 2009

Hanover Finance today confirmed Allied Farmers Ltd had forwarded a proposal to acquire the finance assets of Hanover Finance Limited and United Finance Limited.

Chairman David Henry said the Allied Farmers Proposal would exchange investors Hanover Finance’s secured deposits and subordinated notes, United Finance’s secured deposits, and Hanover Capital bonds for listed shares in Allied Farmers issued at market value.

“If approved, the Allied Farmers Proposal would see Hanover Finance Secured Depositors receive 78 cents in value for every $1.00 of original principal owed, while United Finance Secured Deposit holders would receive 90 cents in value for every $1.00 of original principal owed (these amounts are inclusive of payments of six cents already made under the Debt Restructuring Plan (DRP) in place since December last year).

Hanover Finance Subordinated Note holders and Hanover Capital Bond holders would receive 30 cents in value.

Mr Henry said Allied Farmers would acquire loans and property, finance assets, operating assets and the escrowed cash and property assets as described in the shareholder support package of the DRP.

“Directors have commissioned independent experts Grant Samuel to provide a report for investors on the merits of the Allied Farmers Proposal. This would include an assessment of the Allied Farmers Proposal compared to the existing DRP.

“Following receipt of Grant Samuel’s independent expert report and consideration of this report, the independent directors will make recommendations to investors regarding the Allied Farmers Proposal. At that time we will communicate fully to investors prior to the vote required from them for the Allied Farmers Proposal to be approved.

“The Allied Farmers Proposal is dependent on 75% of Hanover and United Finance investors voting in favour of the proposal, 50% of Allied Farmers’ shareholders also voting to approve the proposal and other usual conditions.”

Mr Henry noted that Hanover had recently released its latest financial result confirming that a worsening property development market meant that it no longer expected to achieve full repayment of investors’ capital as originally intended under the DRP.

Mr Henry says the directors of Hanover will be writing to investors in the near future to outline the nature of the Allied Farmers Proposal. Details will also be posted on the website as they become available.

To view the appendix with proposal details please see the following document: http://img.scoop.co.nz/media/pdfs/0911/Appendix1.doc

ENDS

© Scoop Media