KEY POINTS:
Dorchester Pacific shareholders are to have a vote on putting the company into liquidation, but the group behind the resolution now thinks shareholders would be foolish to support it.
The resolution is also seen as having no chance of success.
Dorchester Pacific said today a special meeting to consider the resolution had been convened at the instigation of the Shareholders Association, which had solicited written requests from more than 5 per cent of shareholders to call the meeting.
But the association had since withdrawn its support for the resolution after debenture and noteholders of Dorchester Pacific's principal subsidiary, Dorchester Finance, approved the terms of a deferred repayment plan on December 17.
Despite the association wanting to withdraw the resolution, Dorchester Pacific today said its directors felt obligated to convene the meeting as it had the support of more than 5 per cent of shareholders.
Association chairman Bruce Sheppard said liquidating Dorchester Pacific made no sense from a shareholder perspective, following approval of the deferred repayment plan.
He would not be at the meeting and suggested shareholders vote against the liquidation resolution, as the bondholders had given them a five-year gift, said Sheppard.
A shareholder would have to be "dumb" to vote for liquidation.
In any case, Dorchester Pacific pointed out that the resolution did not appear to have any prospect of being passed.
The vote will be a special resolution which needs a majority of 75 per cent of those shareholders entitled to vote and voting to pass.
Hugh Green Investments and Auguste Finance, which both had 19.6 per cent stakes, had confirmed they intended to cast their votes against the resolution, Dorchester Pacific said.
The vote is to take place at a special meeting of shareholders being held in Auckland on February 17, following the company's annual meeting.
- NZPA
