ALF - Allied Farmers Limited

[minimoke]

The guys that did due diligence on this must be a tad red faced at the moment.

The colour of their faces must match Mark Hotchins sun tan in Hawaii?

Did they get independent advice like the directors of Feltex?

Disaster zone.

Lewinsky - if we look back to the time teh Allied / Hanover deal was done some key points in teh booklet that went out to investors at teh time included"
- The Independent directors, Henry and Hammond, "unanimously recommend that investors vote in favour" of the proposals.

- The independent report from Grant Samuel also recommends investors should vote for the proposal as it is "superior to the status quo (and the prospect of potential receivership)".

- Guardian Trust, the trustee for Hanover debenture holders, warns that if the proposal is accepted and investors decide to sell their Allied Farmers shares straightaway they are likely to get less than 72c each (the value ascribed to the shares in the deal).

- It also warns that if the deal is approved, Hanover investors will "cease to have any claim against the company, its residual assets or rights, or any shareholder support regardless of whether you voted in favour of the resolution or not".

- Guardian Trust general manager corporate trusts, Bryan Conner, also makes it clear that if investors vote in favour of the proposal they are swapping illiquid debt securities, which are secured against the assets of Hanover for shares in Allied Farmers which are liquid, but rank behind Allied Farmers' other liabilities.

- Also the report says there is little likelihood another offer will eventuate, and that if Hanover stays in its moratorium there is "every likelihood" the company will end up in receivership.
Grant Samuel says that investors are likely to receive less from a receivership than from the moratorium.

[bull....]

Watson and Hotchin must be laughing about how they dumped their crap on alf and escaped liability if it went bust. Probably sunning it up somewhere drinking a Pina Colada

[winner69]

Hope ANF trustee accepts the Hangover assets as new capital so ANF can survive past early October .... minimoke, Liz and myself (and roger) don't want to and can't afford to repay depositers

[minimoke]

Watson and Hotchin must be laughing about how they dumped their crap on alf and escaped liability if it went bust. Probably sunning it up somewhere drinking a Pina Colada

I doubt they are. If you go back to when ALF took over Hanover the stupid (and I'll take the heat for calling them stupid - as well as greedy) Hanover investors thought ALf was a better option. The grass was greener and they would get more money from the deal. But they didn't read that it was clearly flagged that ALF back office were way less competent than hotchin and Watson and that the values were questionable. Hotchin and Watson breathed their sighs of relief a long time ago - complete with $10 - $20m extra cash in hand. I suspect they would have moved on a long time ago - which is why ALF holders are in the poo.

[minimoke]

Hope ANF trustee accepts the Hangover assets as new capital so ANF can survive past early October .... minimoke, Liz and myself (and roger) don't want to and can't afford to repay depositers

Jeez, I'm sitting here wondering just how much we are going to be asked to stump up with - is if around $200m. I'll take heart from Chris Lee's wise words just less than a month ago: "Allied Nationwide Finance, in our view, is a well managed business and the shareholders are beginning to display a willingness to add more capital as they convert the Hanover assets into useful cash."

But then I'm dragged back to reality and reminded ALF / Hanover investors knew ages ago that at least 73% of Hanovers loan book was impaired and 90% of Uniteds was either unsecured or second mortgage loans (now where does this sound familiar - Oh I know SCF and Aorangi). And we are being asked to support the Deposit Guarantee because of turmoil in world financial markets and maintaining public confidence in our Finance Sector. Give me a break - they (the investors and Companies) are incompetent so why should we support them!

[winner69]

Jeez, I'm sitting here wondering just how much we are going to be asked to stump up with - is if around $200m. I'll take heart from Chris Lee's wise words just less than a month ago: "Allied Nationwide Finance, in our view, is a well managed business and the shareholders are beginning to display a willingness to add more capital as they convert the Hanover assets into useful cash."

But then I'm dragged back to reality and reminded ALF / Hanover investors knew ages ago that at least 73% of Hanovers loan book was impaired and 90% of Uniteds was either unsecured or second mortgage loans (now where does this sound familiar - Oh I know SCF and Aorangi). And we are being asked to support the Deposit Guarantee because of turmoil in world financial markets and maintaining public confidence in our Finance Sector. Give me a break - they (the investors and Companies) are incompetent so why should we support them!

Painful eh but thats what capitalism is all about

[bull....]

Jeez, I'm sitting here wondering just how much we are going to be asked to stump up with - is if around $200m. I'll take heart from Chris Lee's wise words just less than a month ago: "Allied Nationwide Finance, in our view, is a well managed business and the shareholders are beginning to display a willingness to add more capital as they convert the Hanover assets into useful cash."

But then I'm dragged back to reality and reminded ALF / Hanover investors knew ages ago that at least 73% of Hanovers loan book was impaired and 90% of Uniteds was either unsecured or second mortgage loans (now where does this sound familiar - Oh I know SCF and Aorangi). And we are being asked to support the Deposit Guarantee because of turmoil in world financial markets and maintaining public confidence in our Finance Sector. Give me a break - they (the investors and Companies) are incompetent so why should we support them!

Gee is this comment about chris for real , I dont read or know him that well but hes obviously a clever fellow lol.

[minimoke]

Painful eh but thats what capitalism is all about

I don't accept that this is capitalism. Without wanting to start a whole debate on what capitalism is or isn't we know that broadly speaking its about a free economy where risk takers get rewarded for taking risk (without government intervention) and bear the loss when the risk goes bad.

I just fail to understand why the tax payer is standing behind useless investors who continue to blindly put money into crappy investment companies (Allied with its CC rating and SCf with its short term C and negative credit watch to name but two) and even now people are prepared to pay $0.034 for ALF. And the tax payer has to stand behind them when things go bad - and the worst of it is that investor money isn't going into the productive sector - its just going to pay earlier depositors off.

How is it that capitalism has evolved so that the Finance Companies get "Special Industry" status. They get free Kiwi saver money; they get tax payer cash; they mange to steer clear of the toothless regulators - yet your ma and pa owned SME down the road gets nada in the way of support.

I don't know what to call it but it sure ain't capitalism.

[minimoke]

Gee is this comment about chris for real , I dont read or know him that well but hes obviously a clever fellow lol.

Apologies - I should have provided a citation. If you follow this link and scroll down to 22 July you can bask in the deeps pools of his wisdom. http://www.chrislee.co.nz/index.php?...July&year=2010

[Dr_Who]

Jeez, I'm sitting here wondering just how much we are going to be asked to stump up with - is if around $200m. I'll take heart from Chris Lee's wise words just less than a month ago: "Allied Nationwide Finance, in our view, is a well managed business and the shareholders are beginning to display a willingness to add more capital as they convert the Hanover assets into useful cash."

But then I'm dragged back to reality and reminded ALF / Hanover investors knew ages ago that at least 73% of Hanovers loan book was impaired and 90% of Uniteds was either unsecured or second mortgage loans (now where does this sound familiar - Oh I know SCF and Aorangi). And we are being asked to support the Deposit Guarantee because of turmoil in world financial markets and maintaining public confidence in our Finance Sector. Give me a break - they (the investors and Companies) are incompetent so why should we support them!

Didnt he say the same thing about a number of finance companies before they went belly up?