Dorchester to take charge on St Laurence stake

Thursday 28th August 2008

Dorchester Pacific, whose shares have tumbled almost 85% this year, will take a one-time charge to write down the value of its quarter stake in finance company St Laurence.

Dorchester had the 25% holding in St Laurence in its accounts at a carrying value of NZ$21.3 million as at March 31. Since then, St Laurence has posted a NZ$29.8 million loss for the three months ended June 30, a period in which it quit lending, withdrew a prospectus and sought to repay investor by installment.

"These events give rise to the likelihood of a need for a further impairment in the carrying value of Dorchester's investment," Dorchester chairman Barry Graham said in a statement. The extent of the impairment charge won't be finalised until St Laurence completes its repayment plan and gains approval from its investors.

Dorchester stock has tumbled as the global credit squeeze forced the company to withdraw its prospectus and seek to make deferred payments to its debenture holders.

The stock last traded at 15 cents on August 25.

By Jonathan Underhill

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