Hanover Finance - with $554 million of investor funds frozen - has told investors it will finalise a restructuring plan by the end of the month covering repayment of funds over an agreed time period.
In a letter sent to shareholders this week, obtained by the Otago Daily Times, Hanover chairman Greg Muir said management had during the past three weeks been working closely with shareholders, trustees and advisers to develop the restructuring plan.
"We are pleased to advise that we are targeting finalising this plan before the end of August, which is an efficient timetable, as it is important to provide more certainty for you as soon as possible," Mr Muir said.
A day after Hanover Finance, owned by millionaires Eric Watson and Mark Hotchin, froze the 16,500 investors' funds in late July, the Commerce Commission took the unusual step of announcing an investigation into whether Hanover had misled investors and the public and breached the Fair Trading Act by making misleading representations to prospective investors.
Yesterday's letter to shareholders gave little detailed assurance to investors, but following an announcement late last week that Mr Watson and Mr Hotchin could put tens of millions into the company's recovery plan, Mr Muir said yesterday it would be "inappropriate" to pre-empt how much would be injected by the pair, who had $50 million of their own capital at risk in the business.
"We understand that people are keen to quantify the support the shareholders [Watson and Hotchin] will offer on top of the equity they already have in the company," Mr Muir said, while noting it was Hanover's "clear intention" to see the company continue and deliver its restructuring plan.
"The board believes that this should maximise the returns available for investors over time," he said.
Meetings would be held around the country to present "key components" of the plan and proxy votes would then be posted to investors, followed by meetings for formal voting in late September or early October, he said.
