Dorchester Pacific says it's the first finance company to emerge from moratorium after investors' today voted through its capital reconstruction plan.
Dorchester froze NZ$176 million owed to about 7,800 investors’ in June 2008 blaming a rapid decline in the property finance market and a continuing fall in reinvestment rates. Investors backed a deferred repayment plan in December 2008 which anticipated them being repaid in full over three years. By late last year it had returned debenture holders half their money.
But, after what Dorchester executive director Paul Byrnes describes as a "landslide of crumbling property prices" threatened further returns, the company came back with its capital reconstruction plan offering investors the chance to swap their debt for a combination of cash, debt, property and equity to try and get the rest of their money back.
Dorchester now aims to develop and grow its consumer and motor vehicle lending business Dorchester Finance alongside its Dorchester Life insurance and savings business.
Read Dorchester's announcement below:
Capital Reconstruction Plan and Capital Raising approved by all security holder classes
At duly constituted meetings of relevant security holders today, all resolutions to approve Dorchester’s Capital Reconstruction Plan (CRP) and Capital Raising were passed by the requisite majorities.
Three special meetings of Dorchester shareholders, debenture stockholders and subordinated note holders, today voted in support of the Company’s Capital Reconstruction Plan.
The Plan is conditional on the company raising a minimum of $8 million of new capital which has been substantially underwritten by the company’s major shareholders, The Business Bakery and Hugh Green Investments.
The favourable outcome of the meeting also places Dorchester as the first finance company to emerge from moratorium.
The voting results were as follows:
1) Debenture holders – resolution to approve the CRP 49,347,510 votes exercised with 80% voting in favour of the CRP
2) Sub-Ordinated Note holders – resolution to approve the CRP 4,128,339 votes exercised with 95% in favour of the resolution
3) Shareholders – Resolutions to approve the CRP and Capital Raising
(i) Resolution 1 to approve the CRP 22,429,216 votes with 99% in favour of the resolution
(ii) Resolution 2 to approve the issue of shares & options 21,635,984 votes with 99% in favour of the resolution
(iii) Resolution 3 to approve the Capital Raising 6,114,051 votes with 97% in favour of the resolution
(iv) Resolution 4 to approve the Underwrite Agreements 8,026,518 votes with 97% in favour of the resolution