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Listed finance company Dorchester Pacific says the collapse of Nathans Finance is the reason for a 13 per cent tumble in its share price on Monday.
Dorchester's shares closed 15c lower at $1 each on Monday, prompting a please explain request from market operator New Zealand Exchange's regulation department.
In his response, Dorchester chairman Barry Graham said the company was unaware of any material information not available to the market that could have precipitated the slump.
Chief executive Andrew Walker pointed out the slump occurred the day after news of Nathans' problems emerged in the media, further souring sentiment towards the finance company sector.
Monday's losses added to a decline in the company's share price from $2.30 in late April.
Walker attributed that to the company's sharp fall in net profit announced in May.
The company's bottom line was marred by $5.1 million worth of write-offs for bad loans at car loan subsidiary Senate Finance and an electricity metering business.
The share price decline had worsened after Bridgecorp's collapse last month.
The impact of the two most recent collapses was being felt through the company's rate of reinvestment from investors.
However, Walker said the company was still getting strong support from investors in the Korean and bowling communities.
"Our liquidity remains high and our cash levels also are substantial."
Dorchester shares closed a cent higher at $1.01 yesterday.