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Investors in stricken finance company Dorchester Pacific will have to wait a little longer for details of management's restructuring plan, which the company yesterday said would see them get all their money back over a three-year period.
A day after St Laurence Finance and Investments, with whom Dorchester's fate is entwined, announced details of its own imminent restructuring proposal, Dorchester's management said their plan was "now well advanced". The company's trustee, Perpetual Trust, had confirmed the plan had merit to be put to a debenture holder vote.
However, there were "a number of relatively minor points to work through" before material could be sent to investors, Dorchester said.
Perpetual Trust's Louise Edwards told the Business Herald she believed there was merit in the proposal but stopped short of saying she was "happy" with it.
Dorchester said investors, who are owed about $170 million, could receive all of their principal back over a three-year period through a managed wind-down of the company's loan books if the proposal is approved.
Chairman Barry Graham said it was hoped documentation would reach investors in time for a vote and a subsequent 20 per cent return of principal before Christmas.
Directors disclosed that Dorchester's 25 per cent stake in St Laurence, for which it paid almost $30 million in March 2007, has now been written down to nil.
That writedown, along with further provisioning against Dorchester's property loans and trading losses over the six months to September, has reduced Dorchester Pacific's shareholders' funds from $41.7 million at the end of March to about $5 million, the company said yesterday. Dorchester Pacific shares closed 6c lower at 9c yesterday.
Dorchester and St Laurence are among a number of finance companies that froze repayments to investors mid-year.
Since then investors have been forced to wait for restructuring proposals.
Having ceased repayments in June, Dorchester initially said a proposal was likely in September while St Laurence, which faltered the same month, said a plan was likely in August.
Hanover Finance, which ceased payments in July, also said a plan would be put to investors in August. Although imminent, Hanover has yet to release the proposal.
Meanwhile, Dominion Finance Holdings' subsidiary North South Finance has yet to release its proposal for a "deferred repayment plan" despite trustee Graham Miller of Covenant Trustee Company greenlighting the proposal in early September.