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Thursday, November 19

Relieved of the Shareholder Support package obligations incorrect-Hanover chief said

The Independent Chairman of Hanover Finance, Mr David Henry, today stated the suggestion that Hanover’s major shareholders are “relieved of the Shareholder Support package obligations” under the Allied Farmers’ Proposal is manifestly incorrect.

“It’s important to note that as part of the Allied Farmers Proposal the Hanover Shareholder assets - agreed and voted for by investors as part of the DRP (Shareholder Support Package) - are required to transfer to Allied Farmers.

“This means approximately $10 million cash in escrow, all issued shares in the Axis Companies and the mortgage over the Matarangi Beach Estates property will be transferred to Allied Farmers. These assets transferred to Hanover for $76 million at the time the DRP was agreed to by investors, on the basis that the shareholders would only be paid for them if investors were fully repaid. In effect the Allied Farmers Proposal, if agreed, requires Hanover Shareholders to write off the subordinated debt of $76million due to them” said Mr Henry.

Mr Henry was responding to wildly inaccurate media comment attributed to Mr Bruce Sheppard, which he had asked to be corrected yesterday. Unfortunately the inaccurate comment has been picked up by media.

Full details on merits of the Allied Farmers Proposal will be provided to investors, and to media, once the Grant Samuels’ independent expert report has been finalised.