Dorchester Capital Raising Closes Oversubscribed

Dorchester Capital Raising Closes Oversubscribed
$10.3 million raised from 944 Shareholder and Debenture Holder subscribers

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

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