Dorchester Pacific discloses big St Laurence loss

Finance company Dorchester Pacific has disclosed that fellow property financier St Laurence made a pre-tax loss for the 3 months ended June 30 of NZ$29.8 million, which would in turn reduce the carrying value of Dorchester's 25% stake in St Laurence. Here is the full text of the announcement below.

As noted in an earlier announcement by Dorchester Pacific, on 24 June 2008 St Laurence withdrew its prospectus and announced its intention to present a repayment plan to its investors for approval. St Laurence Ltd has since advised that it made a $29.8 million pre-tax loss for the quarter ending 30 June 2008. Under equity accounting rules Dorchester will be required to equity account this loss resulting in a reduction in the carrying value of its 25% holding in St Laurence. These events give rise to the likelihood of a need for a further impairment in the carrying value of Dorchester's investment in St Laurence. As at 31 March 2008, the carrying value of Dorchester Pacific's 25% holding in St Laurence was $21.3 million. Dorchester will not, however, be in a position to quantify the extent to which that value has been impaired until after St Laurence's proposed scheme has been finalised and voted on by its investors.