Elders Finance 'tidies' the books

By Deborah Hill Cone

Friday 2nd August 2002

ELDERS FINANCE: New accounts 'bolstered up'

Finance company Elders Finance has issued more shares in what parent company Hanover Group's managing director, Kerry Finnigan, describes as a tidying up of its balance sheet.

In July Elders notified the Companies Office it had issued 1.3 million new ordinary shares on top of the 10.5 million existing shares, which are 50% owned by Eric Watson and 50% owned by Mark Hotchin.

The issuing of new shares did not alter the ratio of shares held by the two investors, Mr Finnigan said, and when the company's new financial statements were released they would show shareholder funds had increased considerably.

The company was way ahead of its capital adequacy requirements spelled out under its trust deed, Mr Finnigan added.

"It's been done so the balance sheet looks good for an investor - the shareholders want the balance sheet to look good," Mr Finnigan said.

The "tidying up" also involved getting rid of redeemable preference shares.

The new accounts would show equity in the company had been "bolstered up" and some retained earnings had been capitalised, Mr Finnigan said.

Interim accounts for the six months to December 2001 showed the company had issued and paid-up capital of $13.7 million and retained earnings of $16.2 million, with total assets of $409 million and total liabilities of $378 million.

The company's accounts for the year to June 30 were being audited and it was expected they would be signed off and a new prospectus released to the market in September.

Mr Finnigan said Hanover's other finance subsidiaries, Nationwide and Leasing Solutions, were operated as separate ventures from Elders, reflecting that they specialised in different types of financing.

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