Dorchester raises $10.3m in restructuring plan

Dorchester executive director Paul Byrnes Photo / Greg Bowker

Dorchester Pacific, which kept receivers at bay by convincing investors to accept a grab-bag of securities in exchange for their debentures and notes, today said it raised $10.3 million through the offer.

The capital raising, which was at the top end of its targeted $8 million to $10 million, was underwritten by $7 million by major shareholders the Business Bakery and Hugh Green Investments.

The amount raised included $460,000 from noteholders who elected to get shares instead of cash.

"Looking ahead, we see a number of opportunities in the market,"
said executive director Paul Byrnes.

The capital we have raised will provide Dorchester with a strong financial base from which we can grow the business and create good returns for our shareholders."

Dorchester will use the new capital to grow its consumer and motor vehicle lending book and to increase spending on marketing for its savings and insurance business, he said in a statement.

The new shares will be issued at 10 cents apiece, the price they last traded at on the NZX.

For every new share subscribed to under the capital raising, Dorchester will also issue one option to subscribe for a new share in 3 years at 12.5 cents.

More than 80 per cent of debenture holders, 95 per cent of noteholders and almost all shareholders agreed to the recapitalisation plan in June.