UPDATED: Allied Farmers shareholders say yes to Hanover deal

Allied Farmers shareholders have overwhelmingly supported management's proposal to take over ailing Hanover Finance. 

Over 92% of shareholder votes, representing 17.7 million shares, were in favour of purchasing the financial assets of Hanover Finance and United Finance and issuing new Allied Farmers' shares as consideration. Shareholders voted at a special meeting in Hawera. The proposal also requires a 75% acceptance by Hanover Finance investors who will vote on December 16. 

If the deal is successful, Allied Farmers will take over all the remaining Hanover assets, valued at $396 million. Hanover investors will be issued Allied Farmers shares to the equivalent value of 72 cents in their originally invested dollar, and end up owning most of Allied Farmers.  

Hanover investors have already received a six cent in the dollar payment under a moratorium agreement drawn up earlier this year. The same debenture holders are forecast to receive 70 cents in their dollar if they continue Hanover's moratorium and allow its management manage its own way out by selling its property assets on its own accord.  

Allied plans to issue 900 million new shares, and good performing Hanover loans, estimated to be about 20% of its book, will be transferred to Allied Nationwide Finance. 

The more challenging assets would be transferred to a newly established subsidiary called Allied Farmers Investments. If Hanover investors accept the deal, it is expected that the many of the new Allied Farmers shareholders would immediately sell their shares to realise some of their failed investment. 

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