Dorchester ‘humbled’ by debenture holders’ support for plan
Dorchester Pacific head Paul Byrnes was "humbled" by the support debenture holders gave to the firm's plan to escape moratorium, given the problems in the Allied Farmers-Hanover deal.
Wednesday, June 30th 2010, 9:10PM
by Paul McBeth
Byrnes told despositrates.co.nz that garnering support from four-fifths of Dorchester's debenture holders showed the company has been given another opportunity, and has to deliver on investors' "good faith."
Investors voted in favour of a recapitalisation plan that will give some 7,200 investors still owed about $84 million units in a property trust that will trade on the on the Unlisted exchange and ownership of four hotels Dorchester worth $33 million. They will also get 36.5 million new Dorchester shares, $20 million of three-year interest-bearing notes and options to buy more stock.
Next up for the firm is the capital arising, and Byrnes is optimistic it will oversubscribe to the maximum $11 million with support from high-net worth investors.
"We've had some indications from investors because they can see there's not a lot of competition, there's not a lot of finance companies that have survived," Byrnes said. "Dorchester, with its minimum $25 million in shareholder funds, will have good have a good business to take advantage of any consolidation in the market."
The new capital is expected to be available around August 20, and until then the firm will continue to operate under its new lending policy and slowly ramp up its insurance unit.
Paul is a staff writer for Good Returns based in Wellington.
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