tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, November 1st, 10:39AM

Investments

rss
Latest Headlines

Dorchester wants to buy back its $15m notes early for 92c in the dollar

Dorchester Pacific wants to redeem its nearly $15 million of capital notes more than nine months early because the company's obligation to repay them is preventing the company from securing funding to grow its lending book

Tuesday, July 24th 2012, 10:41AM

by Jenny Ruth

The need to repay the notes, due to mature on June 30, 2013, "has been a significant obstacle in our way to securing bank funding to grow the lending book of Dorchester Finance," says chief executive Paul Byrnes.

Dorchester is offering to buy the notes back at $92 per $100 face value no later than September 12 compared to the last sale on the NZX debt market on July 12 at $79.35 per $100 face value.

Byrnes says the company has been successful in securring a new funding line enabling it to repay the notes early.

"The proposal and repayment are subject to the terms of the funding line becoming unconditional to Dorchester's satisfaction," he says.

Dorchester commissioned a report by Simmons Corporate Finance to assess its buyback proposal which concludes the terms and conditions are fair to noteholders.

The Simmons report notes the Dorchester offer is a significant premium of between 15% and 22% to where the notes have traded on NZX over the past year.

It also says the price Dorchester is offering is at the top end of its valuation range of between 88 cents and 92 cents per note.

"Directors believe that the outstanding notes and the perceived uncertainty around their repayment is adversely affecting Dorchester's share price," says chairman Grant Baker.

"It has also been, and would otherwise remain, an obstacle to any merger and acquisition that would help the Dorchester group achieve scale and profitability. Resolving the notes issue now is a game-changer for Dorchester," Baker says.

Because the trust deed for the notes doesn't allow for such a buyback, Dorchester has called a meeting of noteholders to vote on its proposal for August 14. To succeed, the measure needs to be supported by 75% of noteholders voting.

Dorchester shares rose 0.5 cents to 10 cents following the buyback announcement, valuing the company at $18.1 million. That's the highest level the shares have traded at since October last year when they reached 11 cents. They fell as low as 6.5 cents in December.

 

« Rates round-up: July 23GFNZ to raise $1.5m from underwritten rights issue »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Today's Best Bank Rates
Rabobank 5.25  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
Subscribe Now

Deposit Rates newsletter

Previous News

MORE NEWS»

Most Commented On
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com