Hanover deal tipped to benefit owners

Eric Watson. Photo / Kenny Rodger

Hanover owners Eric Watson and Mark Hotchin are tipped to come off well from a proposed deal to bail out investors.

Neither Mr Watson nor Mr Hotchin fronted at a meeting yesterday to announce the $400 million Allied Farmers offer.

But speculation is building that they will emerge from the Allied deal in a much better position than if the five-year moratorium on paying back investors ran its full course.

Brian Gaynor of Milford Asset Management said debenture holders should have voted for receivership last year and got out as fast as they could.

Since that option was lost last December, anything to extract themselves was better than hoping for money from the moratorium.

Shareholders Association chairman Bruce Sheppard was scathing of the deal, calling on Commerce Minister Simon Power to intervene to halt the transaction which he said would be good for Allied but not shareholders.

"It will also be a great deal for Eric Watson and Mark Hotchin. They will have all of Hanover's debts taken out of the Hanover balance sheet, thus relieving them of any obligations to put the $20 million in."

However, one investor told the Herald any deal that helped return the Hanover millions had to be good.

Glen Stanton, of Milford, and his family have about $255,000 invested with Hanover.

Mr Stanton is one of about 13,000 investors owed more than $500 million who expected last December to get every dollar back.

Last week, they were told only 70c in the dollar could be expected. Yesterday, Allied chairman John Loughlin predicted 78c was more likely.

Mr Stanton said he was trying not to think too much about his money. "If you dwell on it, it could make you go insane. I've got my health and I'm still reasonably well off so I try to put it into the corner of my mind."

He is keen to attend next month's meeting and hear full details of the new plan, which proposes to give Hanover investors shares in Allied which they will then be able to sell on the New Zealand stock exchange.

He said he might well vote for that deal - "possibly, if it was good enough".

But he remains extremely aggrieved with Mr Watson "swanning around in London" and Mr Hotchin building a $30 million house in Paritai Drive.

"They're both as annoying as anything. Most of the shareholders would be hacked off with them. Anything to extract myself from those two ratbags."