Sharechat Logo

Dorchester staves off receivers

Wednesday 30th June 2010

Text too small?

Dorchester Pacific has staved off receivership after it managed to convince investors they will get more from accepting a complicated asset swap.  

More than 80% of debenture holders, 95% of noteholders and almost all shareholders agreed to the recapitalisation plan, the company said in a statement.

The firm will now raise as much as $10 million through a rights issue, $7 million of which is underwritten by cornerstone shareholders the Business Bakery and Hugh Green Investments, which also have options to take on another $1 million between them.  

In exchange for their debentures, some 7200 investors still owed about $84 million will get units in a property trust that will trade on the Unlisted exchange and will own four hotels Dorchester says are worth $33 million.

They’ll also get 36.5 million new Dorchester shares worth $3.3 million at today’s share price of 9 cents, $20 million of three-year interest-bearing notes and options to buy more stock. 

The offer was criticised by the Securities Commission for having a “significant bias” against a receivership’s recovery, and forced the firm to release new information to appease the regulator. 

That failed to deter investors’ support, which executive director Paul Byrnes previously said was positive during last week’s nationwide roadshows, though there were signs of frustration from investors over the failure of the moratorium proposal.  

 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Dorchester lifts Turners Auctions stake to 19.85%; no plans to make offer
Dorchester raises $4.1 million in placement supported by major shareholders
Dorchester investors exercise 134 mln options, major shareholders asked to sell down
Dorchester narrows first-half loss, forecasts FY profit
Dorchester agrees to buy EC Credit for $18.5M in cash, stock and earn-outs
Dorchester rescue plan ups net profit
Dorchester profit boosted by capital reconstruction plan
Dorchester appoints general manager, insurance and lending
Dorchester posts annual loss of $19.1 mill
Dorchester Pacific needs $8 million and investor approval for reconstruction bid