'Experts' have worked for Hanover

Photo / Brett Phibbs

Hanover investors will have to make a decision whether to approve the company's proposed debt-for-equity swap with Allied Farmers based on a report prepared by corporate advisers who have previously worked for the company.

As part of the spadework for the $400 million transaction, under which Hanover and United Finance investors would swap their debentures for shares in troubled listed rural services and finance company Allied Farmers, Hanover's directors have commissioned "independent experts" Grant Samuel to provide a report for investors on the deal's merits.

Yesterday, Matthew Lancaster of Perpetual Trust which as trustee for United Finance acts as the investors' primary watchdog, said his firm was "hoping that the Grant Samuel report will make proper reference to the matters investors need to consider".

Mr Lancaster said Perpetual was aware Grant Samuel had previously been engaged by Hanover to provide a valuation of owners Mark Hotchin and Eric Watson's FAI Finance, now known as FAI Money.

"[Grant Samuel] considered themselves to be independent for the purposes of preparing this report," Mr Lancaster said.

"We are aware of their previous involvement with Hanover, it has been disclosed and we don't believe it compromises their ability to provide an independent report.

"If there are areas in the report that need to be brought to investors' attention or that we don't believe have had sufficient emphasis then that is something we will be outlining in our letter to investors." Mr Lancaster said Perpetual had no plans to commission a report on the transaction itself.

Yesterday Mr Lancaster's colleague Louise Edwards said Perpetual Trust was "committed to helping investors understand the implications of the proposed Allied Farmers transaction. Perpetual Trust will not, however, be recommending what decision investors should make. That is a question for individual investors based on their circumstances."

Hanover Finance's trustee Brian Connor of Guardian Trust did not return the Herald's calls yesterday.