Offeror(s): Hugh Green Investments Limited and The Business Bakery LP

Independent Adviser(s): Campbell MacPherson (Rule 18)

Company Meeting Date: 30/06/2010

On 14 May 2010, Dorchester Pacific Limited (“Dorchester”) announced a capital reconstruction plan whereby a number of new securities would be issued to debenture holders in Dorchester in exchange for their outstanding debenture stock, and also that it would be seeking to raise $10 million in new capital through a proposed rights issue (the “Rights Issue”).

 

The Rights Issue was underwritten by Dorchester’s two largest shareholders, Hugh Green Investments Limited (“Hugh Green”) and The Business Bakery LP (“Business Bakery”) (“the Underwriters”). The Underwriters each held approximately 19.5% of the shares in Dorchester prior to the Rights Issue. If the Rights Issue was not fully subscribed, the Underwriters would be required to honour their underwriting commitments and the resulting allotment of shares to them would be likely to increase their voting control in Dorchester to over 20%. As such, shareholder approval was required for the allotment of voting securities to the Underwriters (the “underwriting allotment”).

 

Rules 7(d) and 16(b) of the Code require the notice of meeting to contain particulars of the voting securities to be allotted. Because the particulars of any allotment to the Underwriters were not known when the notice of meeting was sent, the Underwriters and Dorchester were granted exemptions from rules 7(d) and 16(b) respectively.

 

The underwriting allotment was approved by shareholders at a meeting held on 30 June 2010.

 

Campbell MacPherson prepared a rule 18 independent adviser’s report on the merits of the proposed allotment.