Dorchester Pacific convinces 15% of noteholders to take the cash
Dec. 23 (BusinessDesk) – Dorchester Pacific Ltd., the finance company that persuaded investors to give it a third chance to restructure itself, has convinced 15% of noteholders to take a deeply discounted cash offer.
The Auckland-based firm received acceptances for $1.8 million of its interest-bearing notes, which mature in June 2013 after it last month offered an immediate 55 cents in the dollar cash payment to investors.
The notes were part of the complicated debt-swap that forgave the firm’s debt with investors in return for four new securities – shares, property trust units, the notes, and options. The take-up represents 9% of the total value of notes, and 15% of noteholders, and bolster Dorchester’s balance sheet by $500,000.
“From our earlier communication with noteholders we anticipated a 10% acceptance rate,” executive director Paul Byrnes said in a statement. The acceptances reflect a “preference from noteholders with smaller holdings to take this cash option without brokerage fees.”
The buyback comes after Dorchester reported a first-half loss before tax and a fair-value adjustment. In August, the company raised $10.3 million through the offer via a capital raising that was underwritten by $7 million by major shareholders the Business Bakery and Hugh Green Investments.
The shares were unchanged at 12 cents in trading today and have gained 1.4% this year.