KEY POINTS:
Hanover investors have voted in favour of the failed finance company's controversial rescue plan.
A statement just released by the company says investors have approved its plan to pay back all the $527 million it owes over the next five years.
By value, more than 70 per cent
of each class of investor voted. All of the extraordinary resolutions, each of which required 75 per cent approval, were passed.
Hanover's secured depositers voted yes by a margin of 92 per cent, while those owed money from United voted 94 per cent in favour. Margins for subordinated noteholders and Hanover Capital bondholders were 75 per cent and 93 per cent respectively.
Hanover chairman Greg Muir said investors had "clearly understood the real issues triggering the restructuring proposal, and have demonstrated confidence in the board, management, shareholders and trustees to work through this difficult period in property and finance markets."
"Hanover is confident that the plan has every prospect of delivering on the repayment schedule endorsed by investors. We will be focused on achieving at least that outcome within the five-year term of the plan," said Muir.
Secured depositors and stockholders are due to receive a first repayment of capital on 15 March next year, with further payments quarterly from the end of June 2009 through to December 20
Hundreds of investors gathered at a meeting in Auckland this morning to cast their votes on the future of the failed finance company.
The emotions of some boiled over at the gathering, with one
saying "some investors present won't live long enough to see their money paid back" under the proposed rescue plan.
Several investors asked Hotchin if he would be pledging his own properties to help pay back investors, including his home in the expensive street of Paratai Drive.
Hotchin said his Waiheke Island property had already been pledged and his Paratai Drive home was only half-built.
"Our intention is to finish the house and have it as our home," he said. If necessary, it would be sold.
Chairman Greg Muir defended the company for its attracting investors as close as one month before the moratorium was declared.
"Up until June we were still confident we could pay you back," said Muir.
He said two things had lead to the situation changing. First, the property market collapsed and secondly, other finance companies began to go under or declare moratoriums.
One investor at the meeting, Peter Brown, asked PricewaterhouseCoopers John Waller if the behaviour of directors had been analysed as part of its independent report into Hanover.
Waller said the company had looked at the possibility of litigation if Hanover had gone into receivership.
"There is a great uncertainty, cost and timeframe," said Waller.
He said investors had to weigh this up against the possibility of getting "money in the hand" under the restructure plan.
"If you want retribution and all of that - vote for receivership."
Hanover executives were asked at the meeting if they would remain in their positions should the plan be approved.
Chief executive Peter Fredricson said he would remain in the job as long as investors wanted him there.
"I've had a lot of abuse, particularly over the last two or three weeks," he said. "I'm happy to do the job so long as you want me to."
Chairman Muir said he had planned previously to take on an executive job and he would be leaving Hanover. Muir, a former chief executive at The Warehouse, said earlier this month that he was taking on the job of chief executive at childrenswear retailer Pumpkin Patch.
Shareholders' Association chairman Bruce Sheppard tried to ask a series of questions at today's meeting, but after a show of hands from those at the meeting, was only allowed to ask one.
He asked PwC's John Waller how much could be gained by taking legal action against directors and whether that had been included as part of the investigation into the receivership option.
Waller said this would require a lot of legal advice -- but on balance there was an opportunity to get more money back under the restructure plan than under receivership.
One investor speaking before the meeting began, Arthur Downes, said he would be voting in favour of the rescue plan, saying it was "the best chance of getting it back, even though we have to be patient."
"A lot of us have been stung by a few others," said Downes. A keen traveller, Downes said the Hanover collapse had meant he had been forced to curtail his travel plans.
Another Hanover investor, Pauline Stansfield, said she put money into the company "because they were paying 1 per cent extra than the bank". The bank had encouraged her to "spread her money around".
"It's been very disappointing," she said.
"We've had a very difficult time deciding which way to go," said Stansfield.
She remains hopeful of getting all the money she had invested with Hanover back. Regardless of this, she told nzherald.co.nz that the Government should "step in and regulate finance companies."
EDWARD GAY/HERALD ONLINE
Details of the payback plan are available at:Hanover Finance
