Hickey on Hotchin
One of the hardest working writers on the net has to be Bernard Hickey. His omni-presence leads to like all blogging, overload at times and he is accused of hammering the same subjects, again as you have to when you write so prolifically over the net.
Like him or loathe him I think everyone would agree that despite changing is mind far too often for a bloke, he puts in the grind and comes out with some pretty darn good stuff in between the lull periods there are in New Zealand business where not a hell of a lot happens. You can't break a Crafar story every week!
Bernard's latest column encapsulates my feelings on Mark Hotchin rather well. Here is a guy that stereotypically pinkos would align to the free marketeers and political right wing. They should not. I call bullshit on him and his lifestyle as well. He, along with Eric Watson took $41 million in a dividend in June 2008.
Hanover investors are terminally stupid. However that is no reason now that the company is fast going tits up like a deceased cow, to take advantage. Hotchin and friends took advantage when times were good, and now times aren't they need to man up and stop pretending they are actually good businessmen. They are not. They are failures. They can't even stick to the repayment plan that saw them dribble in a few cents at a time.
They managed to con investors into not slapping the receivers on them first up. Now they are trying to lull them into a debt/equity deal. I would advise against this solely on the investors had no idea what they were first getting themselves into let alone now with this very techncial proposal. It is laughable they would even consider it. More stress and worry for people who thought Hotchin and Watson would stick to the repayment plan and then welched within the initial stages of it.
The danger is that Hanover investors are about to lose again as a potentially savvy vulture investor picks the juicy bits off the bones of the Hanover carcass in return for worthless shares.
And that's what the corporate vultures are now doing. Separating the worthy and the worthless parts to the business and heavily gift wrapping the two strongly enough so that analysts and advisors again cannot see what really is in the last layers of gift wrap and the implications of those final layers. Guess where the more valuable parts are likely to end up? You reckon?
In the meantime Hotchin and everything he touches as well as his family's entire asset base is tainted. This is what Hanover investors have to see every week in the social pages. Yes, it is unfair to single out a wife, she wasn't part of the business. But she sure as dam looks like she's sucked off the proceeds of it nicely. I don't care how many charities Mrs Hotchin is involved in, Hanover investors blood pressure must rise every time they see her.
Hickey calls him out on the Paritai Drive partially built home Hotchin has. This has become a symbol somewhat for Hanover investors as he promised to put it up on the blocks.
The focus on this property, in it being the status symbol of all Auckland's real estate misses the bigger picture of all his other properties as well and his overseas travel, holidays, luxurious accessorising, cars and even worse - his social acceptance. It's not the done thing when you are in charge of owing that much money to that many unsophisticated investors to live a life of external opulence.
While Hanover investors remain a stupid species - I think they have ever reason on the planet to once again feel mightily pissed off.
Put the puppy with the receivers and get on with the rest of your lives!!
Like him or loathe him I think everyone would agree that despite changing is mind far too often for a bloke, he puts in the grind and comes out with some pretty darn good stuff in between the lull periods there are in New Zealand business where not a hell of a lot happens. You can't break a Crafar story every week!
Bernard's latest column encapsulates my feelings on Mark Hotchin rather well. Here is a guy that stereotypically pinkos would align to the free marketeers and political right wing. They should not. I call bullshit on him and his lifestyle as well. He, along with Eric Watson took $41 million in a dividend in June 2008.
Hanover investors are terminally stupid. However that is no reason now that the company is fast going tits up like a deceased cow, to take advantage. Hotchin and friends took advantage when times were good, and now times aren't they need to man up and stop pretending they are actually good businessmen. They are not. They are failures. They can't even stick to the repayment plan that saw them dribble in a few cents at a time.
They managed to con investors into not slapping the receivers on them first up. Now they are trying to lull them into a debt/equity deal. I would advise against this solely on the investors had no idea what they were first getting themselves into let alone now with this very techncial proposal. It is laughable they would even consider it. More stress and worry for people who thought Hotchin and Watson would stick to the repayment plan and then welched within the initial stages of it.
The danger is that Hanover investors are about to lose again as a potentially savvy vulture investor picks the juicy bits off the bones of the Hanover carcass in return for worthless shares.
And that's what the corporate vultures are now doing. Separating the worthy and the worthless parts to the business and heavily gift wrapping the two strongly enough so that analysts and advisors again cannot see what really is in the last layers of gift wrap and the implications of those final layers. Guess where the more valuable parts are likely to end up? You reckon?
In the meantime Hotchin and everything he touches as well as his family's entire asset base is tainted. This is what Hanover investors have to see every week in the social pages. Yes, it is unfair to single out a wife, she wasn't part of the business. But she sure as dam looks like she's sucked off the proceeds of it nicely. I don't care how many charities Mrs Hotchin is involved in, Hanover investors blood pressure must rise every time they see her.
 Photos from Noz at The A List | |
Hickey calls him out on the Paritai Drive partially built home Hotchin has. This has become a symbol somewhat for Hanover investors as he promised to put it up on the blocks.
"If it's (the repayment plan) going to be close and we need to put up more, I guess we'll have to find it from somewhere, and that might have to go," he says of the Paritai Drive property. He is applauded".
The focus on this property, in it being the status symbol of all Auckland's real estate misses the bigger picture of all his other properties as well and his overseas travel, holidays, luxurious accessorising, cars and even worse - his social acceptance. It's not the done thing when you are in charge of owing that much money to that many unsophisticated investors to live a life of external opulence.While Hanover investors remain a stupid species - I think they have ever reason on the planet to once again feel mightily pissed off.
Put the puppy with the receivers and get on with the rest of your lives!!
posted by Cactus Kate at 5:28 AM
18 Comments:
Kate,
You and Bernard and Bruce Shepperd all have to try and separate your quite warranted revulsion of Hotchin and Watson from what the best thing for investors is.
Is receivership of statutory management in investors best interest? Let me put it this way, if you were under pressure from the bank to sell your house it is absolutely in your best interests to sell it yourself rather than the bank do a mortgagee sale.
We all know that prices for mortgagee sales are a lot less that for normal sales. And the same goes for receiverships etc. Receivers will just dump assets all day long.
So in a receivership or statutory management investors may get their cash back sooner, but you can be 100% certain they will get less than the 70% now being talked about.
The Allied Farmers deal is audacious; of that there is no doubt. But you can see the logic. In a sense all Allied Farmers is doing is turning the written down loans into the equity the loans always really were.
By doing this Allied Farmers can probably do better than the current 70% level because it doesn't have any time pressure on it to do anything.
This proposal does expose investors to the sharemarket, but it in all likleihood makes them no worse off than they are today, assuming that they all don't rush to sell their shares on the first day.
If an Hanover investor, and admittedly it is a big if, hold their new shares for 3 - 4 years then there is every possibility that they will get more than the face value on issue.
Why? Because Allied Farmers is an operating business and not one lurching towards the cemetery. No one can say what the value of the shares will be in 3 - 4 years, but the balance of probabilities suggests that this is a better deal for investors than the uncertainty of receivership.
Kate - Either you can be a cheerleader for the VRWC or you can have a social conscience. Not both. So suck it up and tell us all what a great success story for capitalism this is. If you can't celebrate someone who has successfuly exploited the ignorant and vulnerable, you should STFU.
Just saying.
How come Hickey missed the watson connection with this Hanover debacle?
Actually a very good story, once you get past the grammatical mangling that has unfortunately become the recent hallmark of Cactus Kate. Try taking a breath every now and again.
"It's not the done thing when you are in charge of owing that much money to that many unsophisticated investors to live a life of external opulence."
But "he" doesn't owe anybody anything, right? The corporate entity may do, but it's not as if he's individually responsible. One of the problems with the public lynching of Hotchin's and Watson's characters is that during the whole credit-slash-property-slash-con, Hanover was an icon of how wonderful the NZ economy was and how smart it is to be a property investor/developer at any level and on any node.
Nice one lady
Boris
You hit the nail on the head "This proposal does expose investors to the sharemarket".
And tell me what if they haven't got 3-4 years to wait for a return per your prediction? Or your prediction is wrong?
The position many of these investors are in right now.
Anonymous 9.01am
It is a great success story for whomever gets the assets that are worth getting.
I'm being truthful in saying that we all know who that will be.
Bigger, faster, stronger.
Not gonna lie about it, is the way it is.
I record my disgust at those who have been in charge of this for their own flogging of the company
Tanmedia - dividends were personally extracted were they not from a company that was tanking, and fees etc...
Ernesto - it must really upset you that I get paid so much in my day job to write.
Kevin - he probably ran out of space.
And people wonder why New Zealanders prefer the property market!
Ernesto - it must really upset you that I get paid so much in my day job to write.
Not really, I am quite happy with what I get paid too, thanks.
Kate and others..
A number of commentators have said this is a great deal for Allied and a bad deal for investors.
You can't have it both ways. If the investors are shareholders in Allied then they get the benefit of it being such a good deal for the company!
The point I was making initially was that the Hanover investors currently have to wait the remainder of the moratorium to get their cash back. its being drip fed at the moment at a very slow rate.
So today they have to wait the bulk of the 5 years to get their cash back. That's todays reality.
If they own shares in Allied and all rush to sell then they will get very little. If they hold on, they could do better.
At the moment they have no options, but under the Allied deal they do have an option. Hold or sell. That option has a value, and shouldn't be ignored.
Boris,
Everyone who is or would be a buyer for the assets Hanover have their mtges over knows which assets they are.
They are priced at Receivership level already.
Hanover are not Developers so I just dont believe they can add value in anyway to these assets or their disolution. Especially where they are second mtgee and have limited if not zero power.
A Receiver can administer them just as well as Hanover can. Probably better as I doubt any bias towards the "owners" would creep in as they assess deals on the table.....
And lets face it, who ran this business into the state it is today!I mean really, the coy was struggling to keep reinvestment rates up all through 2008 to maintain cashflow and the owners take $80 million odd in Dividend!!!!
Very prescient timing eh.
I think the posts on Bernards Blog sum up the Allied deal.
Well, we all know where he lives.
Watson and Hotchin taint everybody they associate with. Even the Allied Farmers stock buyers are finding resistance from cull cow sellers. And the Auckland Racing Club made Watson's bloodstock manager their chairman. That will come back to bite them on the arse.
Ernesto
Come on bitch, let us see your casual writing on a blog. 1000 words on a topic of your choice, every day for 3 years. Dare you.
Ernesto - you are a tosser. Put up of STFU.
Boris,
The Allied shares will only have a value if someone will buy them off these hapless investors.
Who will do that? If so, at what price?
BTw , you are making the same mistake as Hanover. That is, dont invest in shares/developments which wont sell for more than they cost and for which there is no market to buy!
There was some wag who wrote that this entire business was a good thing in that it rid the finance industry of some really stupid investors.
As was well said, "If you do not understand what you are involving yourself in, you have no business involving yourself in it."
LGM
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