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Experts split in Radio Live survey ahead of Hanover Finance vote
A survey of financial experts by Radio Live Business Editor Andrew Patterson ahead of a meeting at 10.30am of Hanover Finance investors has found experts evenly split between accepting and rejecting the debt-for-equity offer by Allied Farmers. My view is to accept the offer and is here.
Commentators were asked the following question:
Based on your knowledge of the deal being proposed, and in your professional opinion, should Hanover & United investors vote in favour or reject the deal that has been made by Allied Farmers to acquire all the assets of Hanover & United Finance as part of a debt-for-equity swap?
The results are below.
Important Note : This survey doesn't constitute investment advice and does not take into account the personal circumstances of individual investors. The participants in the survey take no responsibility for the outcome as a result of acting on their recommendation. Hanover investors should seek their own independent advice before casting their vote.
5 Comments
"This deal doesn’t provide Allied
"This deal doesn't provide Allied with additional liquidity which is their most pressing issue right now"
And this is the problem.
To maximise what they get for all the land/failed projects held by Hanover, Allied will have to spend a lot of money furthering the developments. Allied's comments that they are good at repossessing cars and selling them is just not applicable and indeed worrying if they think its that simple.
For example ,you can bet that Castle (Reesby) which got Tony Gapes into Five Mile is also assisting with funding. Gapes probably wouldnt do it unless he had that resource available.
So where is Allied going to get the money from to do that? They are woefully undercapitalised now.
Mtge the assets back to Hotchin and Watson maybe? haha.
I have voted against it.
I have voted against it. If we stay with Hanover and it goes into receivership at least we know we will get something. At the moment we have some land and bricks and mortar to sell. If we go with Allied we lose solid assets and end up with bits of paper, share certificates. We are asked to go with a company which has seen it's share price diminish considerably and which has high debt. It's the frying pan or the fire.
I agree it will give
I agree it will give investors much needed liquidity but it will be at cents in the dollar with an extra couple of billion shares on issue. Why I think it is a terrible deal for Hanover is there is no obligation to take proceeds (if any) from repaid loans to return it to shareholders, there is every chance it will be used to repay maturing debenture holders in Allied / Spiers first of all which could suck up the 300 odd million. With the government guarantee expiring and Allied having NO access to funds from anywhere else which has been proved by their failed capital raising.
Alternatively they could use the money to expand their lending and again Hanover investors will see their funds tied up in further loans. Allied havent exactly been a stellar performer and the MD has little finance experience. It is arguable if Allied would have survived if there was no government guarantee taking into account their massively leveraged balance sheet.
Unfortunately the decision will be based on a hatred of Hotchin and his expensive new house.
I cannot believe the financial
I cannot believe the financial commentators who are saying investors should go with the deal. I have to question their reasons for doing this.
The fact that the shenanigans at Hanover seem to be legal is disgusting. Shell companies, related party lending, the extraction of huge dividends in the run-up to the collapse....the whole financial community is tainted by the long-running saga. The people involved in business - commentators, advisers, govt agencies, company owners & directors etc - need to understand that the public i.e. potential investors i.e. sources of capital will not continue to dumbly accept these outrageous situations. Credibility and trust is being destroyed.
Unfortunately they have voted for
Unfortunately they have voted for it. But it was too close for my liking. Wonder if the voting was done independently, and if there is going to be a recount.