Hanover posts $102.9m loss, writes off $308.9m

Sister company United Finance is in a somewhat better state but still posted a $24.4 million net loss after writing $29 million off the value of its assets.

The Hanover accounts, delayed by "the ongoing challenges of the economic environment" and by the need to comply with the International Financial Reporting Standards (IFRS), show Hanover's net assets, and therefore shareholders' funds at June 30 were negative $38.1 million compared with positive $64.9 million a year earlier. United's net assets at June 30 were a slim $161,000, down from $24.7m a year earlier.

The two companies, which are owned by entrepreneurs Eric Watson and Mark Hotchin, said last week they no longer expect to return all the capital owed to their debenture investors, who stopped receiving any interest from June 30 last year.

Directors now forecast Hanover investors will get 70 cents in the dollar while United investors will get about 90 cents in the dollar. That includes the $10 million put up by the companies' shareholders which is so far undrawn but held in escrow. Subordinated noteholders of both companies are unlikely to receive anything.