nzherald.co.nz will be covering the Hanover meeting throughout the day.
Hanover investors have cast their votes on the $400 million Allied Farmers deal after a public meeting in Auckland today.
Around 1000 investors attended the public meeting to decide whether to sell their assets to Allied Farmers in exchange for shares.
The deal needs 75 per cent support from each of the four classes of investors. The results of the vote are not yet known.
Around 15,000 investors are owed $500m from Hanover and United, which stopped making repayments on the debts in July 2008.
Chair of the meeting Chris Darlow told the meeting that 59 per cent of the deposit holders, 63 per cent of secured stock holders, 58 per cent subordinated note holders and 65 per cent of bond holders have already cast their proxy vote.
He said the result of the proxy votes would remain confidential.
Financial commentator Bernard Hickey, who was blogging from the meeting, said he felt those attending would vote against the plan.
"My gut feel from the tone of the meeting and the questions so far is that investors are likely to vote against the proposal because it involves taking shares in a company and a stock exchange they don't trust," he said.
Allied Farmers has been questioned by investors on its performance last year that included a $34m loss and a drop in the share price.
Managing director Rob Alloway said the loss was due to the drop in dairy pay-outs and a change in accounting practices.
The deal was a "strategic opportunity for all of us" and would turn Allied Farmers into an "iconic company".
Hanover director Eric Watson has been labelled "chicken-livered" and a "shyster" by investors at today's meeting.
Tom Brosnahan questioned whether the deal between Hanover and Allied Farmers was rushed.
He said the Hanover directors were keen to get rid of investors who were a "millstone" around the necks of directors.
"Your shyster in the UK hasn't got the balls to appear here. Is it because the quicker you get rid of us, the better?" he asked.
Hotchin said the deal was postponed because auditors took longer than expected.
Another investor, Dr Brian Earnshaw, said he had a doctorate in electro-physics and considered himself intelligent.
"But when it comes to investing money I am dumber than dumb, as my $70,000 investment in Hanover Finance's so-called secured debentures clearly shows,"Dr Earnshaw said.
He said Watson was too "chicken-livered" to show up.
"Mark Hotchin should be applauded for at least having the guts to front up," he said.
Another investor, Mervyn Cotter, invested $100,000 into Hanover and turned his back on the panel while addressing the meeting.
He described the proposal as a "disaster" and told the meeting: "I want out of this, I want out of this mob". He was applauded back to his seat.
Glen Stanton, a debenture holder in Hanover and United and representing his family trust, asked the meeting what had happened to the NZ$20 million 'top-up' promised by Hotchin and Watson.
Hotchin responded, explaining that the NZ$20 million guarantee would only be triggered if payments were missed and they haven't been missed yet. He also said the clause forcing the investment would not be triggered if Hanover was put into receivership.
Financial adviser and proxy holder Murray Weatherstone asked the meeting if the Grant Samuel's independent report can be trusted given its disclaimers are so widespread.
"It appears the independent report is a bit like the way a drunk reviews a lamp post," Weatherstone said.
He asked why a receivership would be so bad, given a receivership would not necessarily lead to a fire sale.
Weatherstone also questioned how much Allied Farmers shares will be worth and was widely applauded.
Frances Coventry is a trustee of a family trust who invested in Hanover.
She said Hanover was described as a "respected company with excellent history"
"We are now being asked to invest in a respected company with an excellent history," she said, referring to Allied Farmers.
She asked if any Allied Farmers directors were on the rich list.
"When the money comes in, I don't want it invested in Watson-like race horses or houses in wherever they may be," she said.
Alloway said he could not say if any of the directors were on the rich list and he regarded personal finance matters as personal.
Mike Purvis, a man with a burns bandage covering most of his face, said he is owed NZ$260,000 and asked about how much Allied Farmers shares are worth and the likely dividends.
Alloway said that Purvis would receive 936,000 shares but he said he can't forecast the timing or amount on dividends.
"We will be a wee way off paying a dividend. This is not a healthy loan book. Just like you, I have a lot invested in Allied Farmers. I want earnings on my investment too. Our drivers are exactly the same," Alloway said.
Shareholders of Allied have already approved the proposal, which Grant Samuel described in a report to the equally supportive Hanover board as "a backdoor listing of Hanover."
The deal would transform Allied into a finance company of vastly more equity paper, with 97 per cent held by the new investors and shows the willingness of Allied's existing shareholders to accept a deal where they're watered down to less than 5 per cent.
A previous Radio Live survey of financial experts found them evenly split on whether investors should reject or approve the Allied Farmers deal.
-EDWARD GAY/INTEREST.CO.NZ
