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Dorchester Repayment Plan Passed

Fuseworks Media
Fuseworks Media

Wellington, Dec 17 NZPA - Dorchester Pacific has got repayment plans for its finance company through meetings of note and debenture holders in Auckland today.

The votes were expected to go that way as a vote by Hanover Finance investors at the same location last week had also favoured restructuring over liquidation. The New Zealand Shareholders' Association has been critical of investors who vote to keep those who failed operating.

Dorchester said 97 percent of debenture stockholders and 99 percent of noteholders voted for the plans that will repay their principal over three years.

"While the result is pleasing we appreciate that it is no cause for celebration," executive director Paul Byrnes said.

Debenture stockholders will receive an initial payment of 20 percent and noteholders will receive an initial payment of 10 percent prior to Christmas.

A financially viable business will be necessary firstly to achieve the repayments to investors over the next three years and secondly to attract support from shareholders in raising new equity and restructuring the balance sheet in the next year or so, Mr Byrnes said.

The finance unit of Dorchester Pacific owes 7200 debenture holders $168 million after it and related company St Laurence froze funds in June. Unsecured noteholders are owed $8m.

The company is not planning to pay any accrued or future interest to investors but debenture stockholders participate in a profit share plan that pays an amount at the end of the three years.

The business will continue to operate as a going concern but on a much reduced scale. No new lending on property will be undertaken over the term of the plan. Consumer lending will be restricted under lending covenants in the plan.

NZPA WGT pjg gt

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