DORCHESTER FINANCE INVESTOR UPDATE

Dorchester Finance, a wholly owned subsidiary of Dorchester Pacific, today issued the following update to debenture and note holders.

2 September 2008
 

Dear Investor,

I am writing to update you on our progress in finalising the deferred repayment plan.  On Friday 29 August we presented our proposal to the Trustees, Perpetual Trust Limited and New Zealand Permanent Trustees Limited.

In putting the plan together we have been working closely with a number of independent professional advisers, including Grant Samuel and Associates, PricewaterhouseCoopers and Jones Lang LaSalle.

The work, input and advice of the independent advisers has been invaluable.  However, it has taken longer to produce the plan than initially anticipated and we apologise for this.  The plan is, as a consequence, both robust and realistic and we feel very confident that it is in the best interests of the debenture stock holders and note holders to support it.

The review by the Trustees is an important part of the process and has to take place before the plan can be presented to the debenture stock holders and note holders.  We remain hopeful, however, that the plan will be communicated to you for voting around the end of September 2008.

As at 28 August 2008 Dorchester Finance’s cash holdings were just over $30 million compared to $18 million at the time we announced the suspension of maturity repayments.

If you have any questions please feel free to call our investment team on 0800 100 601.

Yours sincerely

Paul Byrnes
Executive Director
Dorchester Pacific Limited