Chairman David Henry said in a statement that the requirements of International Financial Reporting Standards, in which companies have to account for unrealised changes in the fair value of their assets, had impacted heavily on Hanover's full-year result, and that "property market indicators are still moving in a negative direction."

"There has been a significant deterioration in the property development sector resulting in a disconnection between property valuations and the market value of assets," Henry said. "The current forecast indicates we are no longer likely to achieve full repayment to investors under the DRP."

The company expects to release its final full-year results by the end of next week.

Hanover's directors predict secured depositors in Hanover Finance will receive about 70 cents in the dollar, while United Finance investors can expect approximately 90 cents, though the forecast will depend on whether future loan provisioning is required.

"We are unable to forecast any repayment for subordinated note and bond holders," he said.

Investors in Hanover have so far received 6 cents, and the company indicated the property market was looking gloomy in its September update.

Some 16,400 investors owed about $550 million agreed to the company's repayment plan last year, and major shareholders Hotchin and Watson, who have some $60 million tied up in the company, personally injected as much as $96 million as part of the plan.