Dorchester makes second repayment

Monday 30th March 2009

Dorchester Finance paid the second installment to debenture holders under its deferred repayment plan and said it is on track to meet the next payment on June 30.

The unit of Dorchester Pacific is "currently ahead of expectations in relation to our cash position," executive director Paul Byrnes said.

Repayments to date amount to 25% of the total it agreed to find for secured debenture holders owed a total of $164 million. Under the plan agreed with investors, Dorchester will make a total of 12 payments over the next three years. Unsecured note-holders are owed about $8 million.

Dorchester Pacific turned to a net loss in its first half after writing off the value of its stake in St Laurence and taking an impairment charge against assets. Under its repayment plan, investors won't receive interest payments though they're entitled to a profit share arrangement at the end of the three-year period.

Shareholder equity plummeted 90% to $6.6 million from $64.4 million in the first half, and directors confirmed an interim dividend would not be paid to shareholders.

The company's stock last traded at five cents on March 26 and has tumbled 91% in the past 12 months.

By Jonathan Underhill

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