Dorchester Pacific Ltd said a capital reconstruction plan was approved by security holders at a meeting in Auckland yesterday.In December 2008, Dorchester's investors voted in favour of a deferred repayment plan.To date 50c in the dollar of principal has
Dorchester Pacific Ltd said a capital reconstruction plan was approved by security holders at a meeting in Auckland yesterday.
In December 2008, Dorchester's investors voted in favour of a deferred repayment plan.
To date 50c in the dollar of principal has been repaid to debenture holders and 10c in the dollar has been repaid to subordinated note holders.
But the board decided the full repayment of principal was not possible without new capital because of a deterioration in the property market.
Under the plan voted on today debenture holders will exchange debenture stock for four new securities. The plan is conditional on the company raising a minimum of $8 million of new capital.
Debenture holders voted 80 percent in favour and subordinated note holders voted 95% in favour. This passed the 75% approval threshold required.
Four resolutions put to shareholders were also overwhelmingly approved.
The company's capital raising plans are supported by major shareholders Hugh Green Investments and The Business Bakery.
The board argues that the alternative to the plan was almost certainly a receivership and that under a receivership debenture holders may only recover 66c to 76c in the dollar of their original principal.
