18 Dec 2008

Finance company repayment proposal gets thumbs up

7:17 am on 18 December 2008

Investors in Dorchester Pacific have overwhelmingly approved the finance firm's plan to repay investors $172 million over the next three years, saving the company from receivership.

Debenture stockholders will get 20% of their money back before Christmas, while the balance of the $164 million owed will be paid quarterly until September 2011.

Unsecured noteholders will be paid 10% of the $8 million owed before Christmas and the rest in September 2011.

Dorchester Pacific executive director Paul Brynes said consumer and car loan books will be recovered first, and the bulk of investors will get 43% back in the first year, with its property assets following.

He said the plan does not rely on the possibility of capital being raised through Dorchester's 1,600 shareholders, though it will need wholesale funding at the end of the three years which that requires a stronger balance sheet.

Mr Byrne said he was pleased at the near full support of shareholders.

He said there is a lot of work to do to achieve a viable business, and at some stage get shareholder for recapitalisation or restructuring the balance sheet.