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Dominion Finance seeks moratorium

NZX-listed Dominion Finance (DFG) is the latest finance company to run into trouble.

Tuesday, June 17th 2008, 11:12PM
It told the NZX yesterday that it was proposing a moratorium due to liquidity issues with both Dominion and its subsidiary North South Finance (NSFL).

It says both companies are having trouble meeting their ongoing payment obligations to debenture holders.

"The primary source for the liquidity pressure has been the impact of the international credit crisis on the confidence of Dominion and NSFL's investor base," and the inability of their lending clients to refinance or repay the debt facilities.

"The board has entered into discussions with the bankers, auditors, and trustee's, with a view to exploring the prospect of those two companies entering into a moratorium with their respective debenture holders."

Under the prospective moratorium the companies would seek the suspension of the obligation to make payments to debenture holders for a yet to be determined period of time with a view to enabling those companies the opportunity to restructure in order to alleviate the liquidity pressures and ensure the maximum realisation of investor's investment in DFG and NSFL.

Final moratorium details have yet to be determined.

Dominion says that it continues to trade profitably. For the months of April and May, DFH has generated $2.611 million in net profit after tax.

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