Hanover Finance says its restructuring proposal is almost complete and may be unveiled by the end of the week.
The Eric Watson and Mark Hotchin owned companies Hanover and United Finance stopped repaying principal and interest in late July to 16,500 investors owed $554 million, citing the collapse
of the property development market and plummeting reinvestment rates.
Two weeks ago Hotchin said he and Watson planned to inject a further $96 million of new equity into the company under the restructuring proposal they were working on which they planned to unveil.
Yesterday a well placed company source said the proposal was being delayed as the trustees' advisers PricewaterhouseCoopers and lawyers thrashed out details.
"They are naturally cautious with all of the drama that's gone on in the industry and so they are poring over every last millimetre of the documentation to make sure that we're all happy.
"We may or may not be able to announce on Friday and given the way things have gone it always takes longer than we expect so it's more likely we'll make an announcement on the week of the 13th."
Watson and Hotchin's recapitalisation of the company will see them tip in a further $56 million in cash and up to $40 million in property assets.
Some commentators have raised concerns that the property assets will likely be those belonging to Hotchin and Watson's property development company which borrowed significant amounts off Hanover Finance. With the rapid deterioration of the property market, concerns have centred around the valuation of these properties.
However, the source said Watson and Hotchin had "taken a really conservative valuation on those and that's appropriate in this environment".
The source said Pricewaterhouse- Coopers were preparing a report on the proposal for the trustees, who in turn had approve it.
Yesterday United Finance trustee Louise Edwards of Perpetual Trust said she realised it was a difficult time for affected investors "and we're working very hard with the company to get a plan out as soon possible".
Once the plan, which proposes repaying investors' principal over five years is approved by the trustees, Hanover will present it to investors and hold a vote within a couple of weeks of that, now likely to be November rather than late this month.
