Hanover Finance is reportedly close to a merger with listed finance company Allied Farmers.
Auditors KPMG yesterday released Hanover's accounts, showing a $102 million loss for the year to June.
The company had an operating loss of $283m, compared to a $10m profit for the previous year.
Bad debts of $137.1m had been written off and provisions made for credit impairments of $136.9m.
Today Radio New Zealand reported that Hanover, as it moved to stave off receivership, was understood to be on the brink of a merger with Allied.
Philip McAllister of the website depositrates.co.nz told Radio NZ that Hanover was looking for a solution to its problems and Allied had acknowledged to the market it was in talks with other finance companies.
Approached by NZPA today, Allied Farmers chairman John Loughlin said, "we don't comment on speculation".
"We're a listed public company, when we've got something to say, we will be saying it," Mr Loughlin said.
Last Friday, Allied told the NZX it had been considering a number of strategic opportunities across its business sectors.
None of those opportunities had been concluded, but considerable work was being undertaken to determine whether any proposals could be completed.
Last month, Allied Farmers said it was carrying out an extensive review of its structure, market presence and operations.
Following a disappointing 2009 result, the review was seeking to establish ways the group could significantly improve its operating performance and market share in the two key rural and financial services businesses.
In the previous few months, Allied had been in talks with "a number of entities" in the rural and finance sectors with a view to achieving consolidation using Allied's status as an NZX-listed company.
Last week Hanover said it was no longer likely to fully repay investors under a debt restructuring plan due to a deterioration in the commercial property development market.
Directors estimated the return to secured depositors was likely to be about 70c in the dollar for Hanover Finance investors.
Investors in subsidiary United Finance could expect estimated returns of around 90c.
Investors voted in December last year to accept the debt restructuring plan under which investors are repaid more than $500m owed to them over the next five years as an alternative to receivership.
