KEY POINTS:
Finance company Dorchester Pacific's investor vote on its deferred repayment plan this afternoon looks to be a foregone conclusion, with proxy votes already received by the company and several financial advisers strongly in favour.
Dorchester investors will meet at 2pm at the Ellerslie Event centre - the same site as last week's Hanover meeting - to vote on the plan under which 7200 investors would be repaid the $168 million they are owed in 12 repayments over three years.
Financial adviser Chris Lee - who has less than $10 million in client money invested in the company and will attend the meeting - said proxies he had received were strongly in favour of the proposal. Other advisers he had spoken to reported similar levels of support.
Yesterday, Dorchester's chairman Barry Graham confirmed proxies received indicated "very strong support for the plan".
"We expect it to be approved by investors and that's consistent with the feedback we've received from the investor roadshow meetings."
Under the plan the first instalment of 20c in the dollar will be paid to debenture investors before Christmas.
Ten quarterly payments of between 5 per cent and 7.5 per cent and a final payment of 17.5 per cent on September 30, 2011, will follow.
Unsecured noteholders owed $8 million would be repaid in two instalments - 10 per cent before Christmas and 90 per cent on September 30, 2011.
The company does not plan to pay any accrued or future interest to investors but debenture stockholders participate in a profit-share plan that pays an amount after the three years.
Dorchester's vote comes a week after 16,500 investors in Mark Hotchin and Eric Watsons' Hanover and United Finance voted in favour of a plan that would see their $527 million in principal repaid over five years despite sharp criticism for the proposal from several financial commentators.
Among the other property financiers which struck difficulties around the middle of the year, St Laurence Finance and Investments had its repayment plan approved by investors two weeks ago and Strategic Finance investors vote on that company's plan on Monday.
In a similar vein to its appraisal of Hanover's plan, PricewaterhouseCoopers said the success of Dorchester's plan was dependent on what were "optimistic" management projections for loan recoveries given current economic conditions.
But while investors have, without exception, voted in favour of finance company restructuring plans rather than allowing the companies to fall into receivership, two of the first companies to take this approach are now showing signs they are finding it difficult to meet their obligations. Boston Finance, which got support for a moratorium in March, has failed to repay investors even half of the 77c in the dollar it pledged to pay by Christmas.
Geneva Finance, which a year ago became the first finance company to secure a moratorium and gained approval for a capital restructuring in April, in October said it had failed to meet profit forecasts contained in its restructuring plan and had also breached its banking covenants.
Yesterday it was put on notice by NZX for failing to issue a half-year report on time. If its report is not out by Monday, its shares will be suspended.
As part of its restructuring plan, 15 per cent of Geneva debenture holders' principal was converted to NZAX-listed shares issued at 36.5c each. Yesterday they were trading at 7c.
The meeting takes place at the Ellerslie Event Centre today at 2pm.
