9 Dec 2009

Hanover relieved at Allied vote

9:05 am on 9 December 2009

Troubled finance company Hanover Finance says it is relieved Allied Farmers is backing a proposal to buy its loan book.

More than 85% of Allied investors who voted at Hawera on Tuesday, supported the plan, well above the 50% mark needed.

Under the scheme, Hanover investors will be paid in Allied shares and should receive around 72 cents back from their original dollar investment.

The $400 million deal still needs the support of 75% of Hanover's investors, who will vote next week.

Under the proposal, good loans - which make up about 20% of Hanover's loan book - will be transferred to the finance arm of Allied Farmers, bolstering its capital base, while bad loans will be put into a new unit.

An independent director for Hanover Finance, Des Hammond, believes the deal will eventually add value to the shares.