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Dorchester posts $35m loss

By Paul McBeth

Monday 1st December 2008

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Dorchester Pacific turned to a first-half loss, reflecting a write-off of its stake in ailing finance company St Laurence and an impairment charge against assets.

The net loss was $35 million in the six months ended September 30, from a year-earlier profit of $3 million, the company said in a statement.

Dorchester is awaiting a vote by investors on its proposal to defer repayments. If the proposal failed to win support, Dorchester would likely be placed in receivership, it said. The loss includes $21.3 million to write down them value of its St Laurence to zero and additional provisioning of $11.5 million.

The plan, which was announced on November 11, would give the company three years to repay secured debenture stockholders and unsecured noteholders. Investors would not receive any interest payments, but secured Debenture Stockholders would be part of a 50% profit share payment at the end of the period.

“The deferred repayment plan which if accepted by investors will provide the company with an opportunity to recapitalise and re-establish those businesses which are likely to be profitable in the future,” said chairman Barry Graham.

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

The company’s stock has fallen almost 80% over the last 12 months to $0.20 per share, and has been as low as $0.06.

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