Dorchester Finance investors will get 12 payments of principal with the first before Christmas, under a deferred repayment plan detailed yesterday.
Investors are to vote on the plan on December 17. The finance unit of Dorchester Pacific owes 7200 debenture holders $168 million after it and related company
St Laurence froze funds in June.
Under the plan, secured debenture stockholders will be repaid their principal in 12 payments over three years, with an initial payment of 20 per cent prior to Christmas. Ten quarterly payments of between 5 per cent and 7.5 per cent and a final payment of 17.5 per cent on September 30, 2011, will follow.
Unsecured noteholders owed $8 million would be repaid in two instalments with an initial payment of 10 per cent prior to Christmas and a final payment of 90 per cent on September 30, 2011.
The company is not planning to pay any accrued or future interest to investors but debenture stockholders participate in a profit share plan that pays an amount at the end of the three years. The long-awaited plan is to be mailed to investors on November 30 and investor roadshows will be held ahead of the vote.
"We appreciate that the delay in finalising the deferred repayment plan has been frustrating for investors," said chairman Barry Graham. "The board considers that the plan provides benefits and options which would not be available under a receivership or in a liquidation."
The New Zealand Shareholders Association had been fighting for liquidation rather than deferred repayment. St Laurence has released a plan outline under which investors have to wait five years before getting all their principal back.
- NZPA
