Wellington, Dec 21 NZPA - Allied Farmers shares fell 32 percent to 10c today as investors in Hanover Group started trading the shares they received in the deal that only just got investor approval last week.

Allied Farmers said 1.9 billion shares were issued to the former investors in Hanover Group, giving them 98.07 percent of the company. The shares were issued at an acquisition price of 20.7c.

James Smalley at Hamilton, Hindin, Greene said that a Hanover investor with a $40,000 debenture would only receive $13,500 if they sold at 10c a share. Investors expecting 78c in the dollar had already received payments of 6c. If they sold shares issued at 20.7c for 10c they were taking a 50 percent loss.

"By selling on the market at 10c you are actually saying I think they are going to get no better than 36c in the dollar," he said.

More than 8.7 million Allied Farmers shares traded today but brokers reported that investors who did not have already have a relationship with a stock broker had to establish one, which involved paperwork.

Investors who regularly trade shares have a common shareholder number, which can be used for trading all listed investments and is accepted by the major share registries in the country.

The new shares issued by Hanover have a default holder number and faster identification number (FIN) number and the link to the common number has to be established.

Also, many Hanover investors did not otherwise own shares so did not have common numbers or accounts with stock brokers.

"The shares have all been issued today but it could well be a drawn out process as to when those shares hit the market," Mr Smalley said.

The selling could intensify as people work their way through the paperwork involved in selling their shares.

Last week, Allied Farmers narrowly secured the 75 percent support of Hanover investors needed to take over the failing finance company's assets in exchange for Allied Farmers shares.

Allied Farmers expected Hanover and United investors would receive notice of their share allocations and FIN numbers from tomorrow onwards, chairman John Loughlin said.

Mr Loughlin said shares were allotted to new shareholders on the evening of December 18, and allotment notices were posted yesterday at noon.

Share allotment notices should be received by new shareholders in the mail from December 22.

FIN numbers enabling new shareholders to trade shares are being mailed today.

New shareholders wanting to trade Allied Farmers shares prior to receiving their FIN number by mail should contact a share broker who can obtain this information from the registry, Link Market Services, by providing the registry with an indemnity. All shares must be traded using a share broker.