Dorchester ‘humbled’ by debenture holders’ support for plan

Byrnes told despositrates.co.nz that garnering support from four-fifths of Dorchester's debenture holders showed the company has been given another opportunity, and has to deliver on investors' "good faith."

Investors voted in favour of a recapitalisation plan that will give some 7,200 investors still owed about $84 million units in a property trust that will trade on the on the Unlisted exchange and ownership of four hotels Dorchester worth $33 million. They will also get 36.5 million new Dorchester shares, $20 million of three-year interest-bearing notes and options to buy more stock.

Next up for the firm is the capital arising, and Byrnes is optimistic it will oversubscribe to the maximum $11 million with support from high-net worth investors.

"We've had some indications from investors because they can see there's not a lot of competition, there's not a lot of finance companies that have survived," Byrnes said. "Dorchester, with its minimum $25 million in shareholder funds, will have good have a good business to take advantage of any consolidation in the market."