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Dorchester unveils three-year repayment plan

Dorchester Pacific has released the repayment plans for its finance company which owes investors $164 million.

Thursday, November 27th 2008, 7:01AM
Under the proposed plan, secured debenture holders would be repaid their principal over three years in 12 installments, with an initial payment of 20% before Christmas. That would be followed by 10 quarterly payments of between 5% and 7.50% and a final payment of 17.50% on September 30, 2011.

Unsecured noteholders owed $8 million would be repaid in two installments with an initial payment of 10% prior to Christmas and a final payment of 90% on September 30, 2011.

No accrued or future interest would be payable to investors but secured debenture holders would participate in a profit share payment of 50% at the end of the three years.

If investors approve the plan at a meeting on December 17, PricewaterhouseCoopers will be appointed monitoring manager to oversee progress over the three year term.

"The outcome contemplated by the plan is dependent on the performance of and volatility in the economy, particularly in the property market,” Dorchester chairman Barry Graham says.

Realisation of the property loan book is where the biggest uncertainty around the plan lies.

"The board considers that the pan provides benefits and options which would not be available under a receivership or in a liquidation.”

He says the finance company would continue to operate as a going concern. Key management would be able to be retained and loans will be able to be realised in an orderly way.

“This would give the Dorchester Group the time needed to restructure its balance sheet, raise new equity, secure wholesale funding lines and participate in any industry consolidation that may eventuate within the finance sector."

No new lending on property will be undertaken over the term of the plan.

Consumer lending will be restricted under lending covenants and will also be subject to a new lending and credit policy recently developed.

In developing the plan a no-new-lending option was modelled but the board believed that a no-new-lending scenario is simply not viable, executive director, Paul Byrnes said.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 ▼3.29 ▼3.45 ▼3.85
ANZ Special - ▼2.79 ▼2.95 ▼3.35
ASB Bank 4.45 ▼3.35 ▼3.19 ▼3.85
ASB Bank Special - ▼2.85 ▼2.69 ▼3.35
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BNZ - Classic - ▼2.79 2.99 ▼2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.75 3.99 4.39
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 ▼2.80 ▼2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC ▼4.40 ▼2.95 ▼2.95 ▲3.69
Kainga Ora 4.43 3.55 3.85 4.14
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - ▼2.65 ▼2.79 ▼3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
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RESIMAC Special - - - -
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The Co-operative Bank - Standard 4.40 3.59 3.85 4.19
TSB Bank 5.34 ▼3.59 ▼3.79 ▼4.19
TSB Special 4.54 ▼2.79 ▼2.99 ▼3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
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Median 4.55 3.50 3.79 3.69

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