Capital Reconstruction Plan
24 August 2010
DORCHESTER CAPITAL RAISING CLOSES OVERSUBSCRIBED
Dorchester Pacific Limited (DPC) advises that it has successfully raised $10.3 million through its entitlement offer. Subscriptions were received from 944 Shareholders and Debenture Holders. The amount raised included $460,000 from Noteholders who elected to receive Dorchester shares rather than a cash settlement for their Notes.
The capital raising, which is part of Dorchester’s Capital Reconstruction Plan, sought to raise between $8-10 million in new capital and closed over-subscribed on 20 August 2010. The capital raising was underwritten by $7 million by the company’s major shareholders, The Business Bakery and Hugh Green Investments.
Paul Byrnes, Executive Director Dorchester, said “We are extremely pleased at the level of subscriptions we have received with more than 940 subscribers participating in the capital raising entitlement offer. This reflects the ongoing support we have received from investors and shareholders over what has been a difficult two years for the company.
“Looking ahead, we see a number of opportunities in the market. The capital we have raised will provide Dorchester with a strong financial base from which we can grow the business and create good returns for our shareholders.”
The new capital that has been raised will be used to help grow Dorchester’s consumer and motor vehicle lending book and will support an increased marketing investment in the savings and insurance business in order to grow revenue and profits and provide shareholder value.
The new shares will be issued at $0.10 per share. For every new share subscribed to under the capital raising, Dorchester will also issue one Option to subscribe for a new share in 3 years at $0.125 per share. The new shares issued under the capital raising will rank equally in all respects to existing shares.
With the success of Dorchester’s capital raising all the necessary conditions of the Capital Reconstruction Plan can now be met. Under the Capital Reconstruction Plan, four securities will be issued to Debenture Holders in return for their outstanding Debenture Stock. These include units in a Property Trust, Interest Bearing Secured Notes, Dorchester shares, and Options to purchase Dorchester shares in three years at a set price. Confirmation of the number of Property Trust Units, Promissory Notes, Shares and Options in Dorchester issued to individual investors will be mailed out to investors on 30 August 2010.
Grant Baker, Chairman Elect of Dorchester and major shareholder, added “There is a need for an active finance industry in New Zealand. This is the area that the banks don’t fill, but that is vital to ensuring our local economy can prosper. There are fewer companies operating in this space now.
“As the economic environment in New Zealand begins to recover, there will be good opportunities for companies, such as Dorchester, that are in a financial position to invest and that can move quickly. With a refreshed board and management team in place, and with the support of our investors and shareholders, we are well placed to take advantage of the opportunities that arise to create value.”
-ENDS-
16 August 2010
Dorchester’s Capital Reconstruction Plan was approved by Debentureholders, Noteholders and Shareholders at meetings on 30 June 2010.
The Capital Reconstruction Plan is conditional on Dorchester raising a minimum of $8 million in new capital in a $10 million capital raising.
The following timetable of events will then occur assuming the minimum $8 million in subscriptions is received. (Some dates may vary by 1 or 2 days).
20 August 2010: Closing date for subscriptions under the capital raising and confirmation
of the successful completion of the capital raising.
Confirmation by Dorchester of the effective date under the CRP, currently expected to be 24 August 2010.
24 August 2010: Issue of Promissory Notes and Options to Debentureholders
24 August 2010: Payment of cash to Noteholders electing to take cash
25 August 2010: Issue of new shares subscribed to under the capital raising
25 August 2010: Issue of Property Trust Units
26 August 2010: Issue of Shares in Dorchester to Debentureholders
26 August 2010: Issue of shares in Dorchester to Noteholders electing to take shares
30 August 2010: Mail-out to Debentureholders and Noteholders advising of the quantity of
Property Trust Units, Promissory Notes, Shares in Dorchester and
Options issued
30 September 2010: First interest payment on the Secured Notes for the 3 month period
1 July 2010 – 30 September 2010 at the rate of 5% per annum
Dorchester Pacific Limited will be holding its Annual General Meeting (AGM) at Alexandra Park Raceway, Greenlane West, Epsom, Auckland on Monday, 6 September 2010 (to be confirmed) commencing at 2pm. All Debentureholders and those Noteholders electing to receive shares are welcome to attend. Please also note that any investors wishing to subscribe for additional shares must have completed the election form and sent it to Computershare prior to the Capital Raising closure on 20 August 2010.
We are aware that Debentureholders have received an offer from Stock & Share Trading Pty Limited for their outstanding Dorchester Stock. The offer is a cash payment of 5% of the outstanding balance of Debenture Stock. Directors of Dorchester advised their estimate of a net present value return of 33 cents per 50 cents of outstanding stock in our Letter to Debentureholders dated 19 June 2010. The Directors do not support the offer from Stock & Share Trading Pty Limited. Investors are advised to seek independent advice before considering the offer from Stock & Share Trading Pty Limited.
ENDS
30 June 2010
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 & options21,635,984 votes with 99% in favour of the resolution
(iii) Resolution 3 to approve the Capital Raising6,114,051 votes with 97% in favour of the resolution
(iv) Resolution 4 to approve the Underwrite Agreements8,026,518 votes with 97% in favour of the resolution
ENDS
Capital Raising Documentation: