Dorchester investors exercise 134m options, major shareholders asked to sell down

Dorchester is the second-best performing stock on the NZX over the past year, having surged 233%.

Dorchester Pacific investors have exercised more options than the financial services firm was expecting and it has asked major shareholders whether they are willing to sell down their stakes in a placement.

About 134 million options were converted to shares at 12.5 cents apiece, or $16.75 million, out of a total 150 million, Dorchester says in a statement.

That was ahead of the 120 million to 125 million expected, and means the pool for a proposed placement of up to 30 million shares may be smaller than anticipated. The conversion price is a 58 percent discount to Dorchester's 30 cent trading price.

"We are now working with major shareholders to see if some of their holdings can be made available as a small secondary pool to go towards meeting placement demand," chief executive Paul Byrnes says.

"As previously advised, the total of new shares issued through the exercise of options and the share placement will be limited to 150 million shares."

The conversion of the options and share placement are expected to boost Dorchester's shareholder funds to $61 million by July from $29 million as at March 31, and will give it headroom to look at acquisition opportunities.

The options were part of a 2010 recapitalisation plan led by the Bakery Business, where some 7200 investors owed about $84 million agreed to convert their debenture stock for four different types of security to keep the firm afloat.

Dorchester is the second-best performing stock on the NZX over the past year, having surged 233 percent.

(BusinessDesk)

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