4 Mar 2009

Troubled finance company buys resort hotel

12:20 pm on 4 March 2009

Dorchester Pacific has bought a hotel in Queenstown and written off an outstanding loan against the property.

The troubled finance company bought the Goldridge Hotel from the first-mortgage receivers for $8 million - a price it says is a sign of a distressed market.

The company has written off a $6 million loan on the property.

Executive director Paul Byrnes says the value of the property needs to improve in order for the company to recover the value of the loan.

He says Dorchester is taking a risk in the hope that the property market will improve over the next two to five years.

Mr Byrnes says Dorchester has money in the bank to repay investors their next three quarterly repayments.

Late last year, investors in the company approved a plan to repay the $172 million it owes them, over three years.