Thursday 20th November 2008
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Principal repayment is likely to be on a five-year timetable.
The DRP will cover 14,000 debenture holders in Hanover Finance and United Finance, and the 1500 people who invested around $25 million in Hanover Capital notes and bonds.
It is expected that the company will aim to return 100% of debenture holders’ principal over a five year period.
However, bond and noteholders are only likely to get 50c in the $1 back.
As previously reported on www.depositrates.co.nz the shareholders, Mark Hotchin and Eric Watson, will stump up with cash and also the assets of Hanover’s property arm, Axis. These property assets will be transferred to the company at a discounted price.
It is expected, as reported earlier, that the support package will total up to $96 million made up of cash, assets and guarantees.
Investors have around $65 million invested in United Finance and $462 million in Hanover Finance.
Hotchin has previously said that one of the aims, aside from repaying investors, is to have a functioning company at the end of the DRP period in 2013.
Investors will get to vote on the proposal on December 9 in Auckland.
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