KEY POINTS:
Hanover Finance shareholders Mark Hotchin and Eric Watson said a debt restructure will include shareholder support of up to $96 million in cash and assets.
Mr Hotchin and Mr Watson, the shareholders of Hanover Finance Ltd, United Finance Ltd and Hanover Capital Ltd, said a detailed debt restructure proposal was expected to be finalised and presented to the trustees soon.
Once approved, it would be mailed to investors in early October.
Mr Hotchin told the website GoodReturns that there would be an initial injection of $36m of cash and $40m worth of property. A further $20m in cash will be injected if required.
In July Hanover froze $554 million of funds owed to 16,500 investors. The finance company has been criticised for related party lending to its shareholders and also for dividend payouts to them.
It is anticipated that an investor meeting to vote on the proposal will be held in late October.
The $96m is in addition to the existing total equity in Hanover Finance of $64.9 million as at the year ended June 30.
Mr Hotchin said the package demonstrated the shareholders' willingness to stand behind the business and achieve the best outcome for investors.
"We want to see Hanover in a position where it continues to trade through this difficult part of the cycle, and we believe the proposal, which puts a priority on returning capital, will return 100 cents in the dollar to first ranking debenture holders," he said.
"Certain terms of the restructure are still being finalised with the shareholders, trustees and their advisers. Completion of the proposal is dependent on those terms being completed satisfactorily, however the economics of the proposal described above will not change."
- NZPA