Hanover investors have approved the plan to sell the company's loan book to Allied Farmers.

Up to 1000 investors met this morning in Auckland to decide whether they should sell their assets to Allied Farmers in exchange for shares.

The deal needed 75 per cent support from each of the four classes of investors.

Hanover Finance's secured depositors voted 75.45 per cent in favour.

United Finance investors voted 79.48 per cent in favour. The subordinated noteholders voted 97.47 per cent in favour and the Hanover Capital investors voted 88.33 per cent in favour.

Around 15,000 investors are owed $500m from Hanover and United Finance, which stopped making repayments on their debts in July 2008.

Allied Farmers director Rob Alloway said the vote showed that a group of investors are looking to the future.

Today's meeting was heated at times but Alloway said it was like any other of the briefings that have been carried out around the country in the last month.

"There is a lot of disappointment, anger and emotion," Alloway said.

Alloway said he and chairman John Loughlin had put their reputations on the line over the proposed deal.

"The work begins now," he said.

Alloway said the board will be meeting on Tuesday to discuss the next steps.

"At the moment a small business out of the Taranaki is cleaning up a big mess," he said.

Asked if he was nervous about the share price, he said some will be selling.

"With selling there is always buying and a transfer of wealth from one group to another but my job is to ignore the share price in the short term and make sure Allied Farmers is pushed into a working position," Alloway said.

Hanover independent Chairman David Henry called the 75 per cent vote in favour showed "strong support".

"By accepting this proposal, investors have chosen an opportunity to realise much greater long-term value from their investment than remaining in the existing Debt Restructure Plan [DRP]," Henry said in a written statement.

He said the Allied Farmers proposal provides a better structure for the assets to be held in than the Hanover and United companies could have achieved in the foreseeable future.

Shareholder Mark Hotchin said Allied Farmers has a good future.

"My immediate focus is to work with the independent directors to ensure the smooth transition of all Hanover assets to Allied Farmers," Hotchin said in a written statement.

Earlier today, chair of the meeting Chris Darlow told the investors that 59 per cent of the deposit holders, 63 per cent of secured stock holders and 58 per cent subordinated note holders and 65 per cent of bond holders have already cast their proxy vote.

Financial commentator Bernard Hickey, who blogged from the meeting, said he felt those attending would vote against the plan.

"My gut feel from the tone of the meeting and the questions so far is that investors are likely to vote against the proposal because it involves taking shares in a company and a stock exchange they don't trust," he said.

Hanover director Eric Watson was labelled "chicken-livered" and a "shyster" by investors at today's meeting.

Investor Tom Brosnahan questioned whether the deal between Hanover and Allied Farmers was rushed.

He said the Hanover directors were keen to get rid of investors who were a "millstone" around the necks of directors.

"Your shyster in the UK hasn't got the balls to appear here. Is it because the quicker you get rid of us, the better?" he asked.

Hotchin said the deal was postponed because auditors took longer than expected.

Another investor, Dr Brian Earnshaw said he had a doctorate in electro-physics and considered himself intelligent.

"But when it comes to investing money I am dumber than dumb as my $70,000 investment in Hanover FInance's socalled secured debentures clearly shows," Dr Earshaw said.

He said Watson was too "chicken-livered" to show up.

"Mark Hotchin should be applauded for at least having the guts to front up," he said.

Shareholders of Allied have already approved the proposal, which Grant Samuel described in a report to the equally supportive Hanover's board as "a backdoor listing of Hanover."

The deal would transform Allied into a finance company of vastly more equity paper, with 97 per cent held by the new investors and shows the willingness of Allied's existing shareholders to accept a deal where they're watered down to less than 5 per cent.

A Radio Live survey of financial experts found them evenly split on whether investors should reject or approve the Allied Farmers deal.

-EDWARD GAY/INTEREST.CO.NZ