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Dominion Finance stock slumps on liquidity of units

Jonathan Underhill

Thursday 19th June 2008

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Shares of Dominion Finance Holdings, the New Zealand lender that this week proposed suspending payments to debenture holders at two subsidiaries, slumped 80% when the stock resumed trading after a two-day halt.

The shares fell 40 New Zealand cents to 10 cents. The NZX declined the company's request to suspend trading in the stock, which was halted on June 17. Dominion Finance had said the uncertainty of its moratorium process and the prospect of a "false market" developing, justified a suspension.

Its Dominion Finance Group and North South Finance units have been hurt by the international credit crisis and the inability of some borrowing clients to refinance or repay debt, according to its June 17 trading halt notice. It hasn't yet announced details of the moratorium.

Dominion Finance today said it hired law firm Chapman Tripp as an adviser, joining corporate advisory service Korda Mentha.

The proposal "appears to have been well received by important stakeholders to date," the company said in a statement today.

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