Dorchester to proceed with doomed liquidation vote

Tuesday 3rd February 2009

Dorchester Pacific, whose main finance unit gained investor approval for its deferred repayment plan in December, will proceed with a special meeting to vote on putting the business into liquidation.

The Shareholders Association forced the company to call the meeting by gaining support from more than 5% of shareholders, though the activist group withdrew support when the repayment plan was approved. The special meeting on February 17, after the AGM, will also vote on removing
chairman Barry Graham and Paul Byrnes as directors, another resolution the association has stopped supporting.

Still, Dorchester Pacific today said it feels obliged to proceed with the vote on liquidation even though there isn't enough support among shareholders for the special resolution to garner the required 75% support.

Dorchester's directors reiterated today that they oppose liquidation, saying it would prevent the company generating the returns needed to fulfill the deferred payment plan.

"Remaining a going concern presents shareholders with a better prospect of realizing future value," the company said in a statement.

Shares of Dorchester Pacific traded unchanged today at 8 cents, having shed 90% of their value in the past 12 months. The company, which owes NZ$168 million to 7,200 investors, in December, restructured the payment obligations of the Dorchester Finance unit to 12 payments over a three year term. It made the first 20 cents in the dollar payment to debenture holders in December with another 5 cent payment due in March.

By Jonathan Underhill

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