9 Jun 2010

Dorchester Pacific capital raising underwritten

11:56 am on 9 June 2010

A property magnate and the trio behind 42 Below vodka are to underwrite a capital raising by Dorchester Pacific, paving the way for the finance company take its capital restructure plan to investors for approval.

Property investor Hugh Green and the Business Bakery, which is the investment vehicle owned by 42 Below founders Grant Baker, Geoff Ross and Stephen Sinclair, will underwrite up to $8 million of Dorchester's proposed $10 million capital raising.

The Business Bakery and Hugh Green Investments each own almost 20% in Dorchester.

Dorchester's proposed restructuring plan involves investors taking ownership of four of its hotels and being issued share options and bonds.

The plan is conditional on the company raising at least $8 million.

Meanwhile, Mr Baker will become chairman of Dorchester, replacing Barry Graham.

Dorchester executive director Paul Brynes will become the company's permanent chief executive.

He says a board reshuffle is needed to get investors on board.

Investors in Dorchester Pacific will be asked to approve the restructuring plan at a meeting in Auckland on 30 June.