Investors turn more heat on Hanover boss

Mark Hotchin received abuse from Hanover investors in Tauranga and Hamilton yesterday. Photo / Mark Mitchell

Emotions continue to run high as Hanover director Mark Hotchin talks to hundreds of burned investors around the country.

But many appear resigned to the fact that a proposed takeover deal of his failed finance company could be as good as it gets.

Hotchin was abused yesterday at briefings in Tauranga and Hamilton, where he and directors from Hanover and Allied Farmers spoke to hundreds of elderly investors about Allied's proposed $400 million takeover.

The rural services firm is proposing to swap shares for Hanover's loan books in a deal that would give Hanover debenture holders a return of 78c for every dollar invested.

At what had been a relatively tame meeting in Tauranga, one woman shouted when she saw Hotchin, "When's your next bloody party in Fiji, you bastard!"

Not long after, a man, who a few moments earlier had told the gathering of about 300 people he had lost $50,000 in United Finance, pointed at Mr Hotchin, gesturing menacingly that he would be watching him.

Another said he had lost $85,000 with Hanover from his initial $250,000 investment.

He questioned whether accepting the Allied Farmers takeover was worthwhile considering it had sustained a loss of $35 million last year and its shares had tumbled in value from about $1.60 to 28c.

"Now that's not good reading for anyone, is it?" he asked.

Mr Hotchin, who for the majority of both meetings sat quietly, allowing other directors to answer questions, said the meetings were about presenting options to investors.

"It would have been very easy for me not to do this, I could have sat at home and just said 'okay if it fails I will deal with it at the time'.

"But we believe this opportunity is so significantly better than the alternatives that we have decided to take it to the investors."

Most investors the Herald spoke to after the meetings felt they had no choice but to accept the proposal.

"We've got to go with it, otherwise what will I get? About 10 cents if the receivers come in, it'd be a firestorm," said one.

"I'm gutted, it's not like we were given that money by a wealthy relative or won it on the pokies ... I started saving as soon as I began working."

Hanover's 17,000 investors are owed more than $500 million and last year agreed to a five-year repayment plan, which promised to repay them in full.

But last month the company said it could at best repay 70c in the dollar to most secured investors and receivership appeared inevitable.

The proposed Allied takeover deal needs 75 per cent support from each of Hanover's divisions - Hanover Finance, United Finance and Hanover Capital - and will be voted on in Auckland on Wednesday.