St Laurence Secures Dorchester Pacific

News Release, 28 February 2007

St Laurence Secures Dorchester Pacific As New Strategic

Australasian property investment and finance group St Laurence Limited is pleased to announce that it has secured a new strategic shareholder, NZX-listed Dorchester Pacific Limited (“Dorchester”).

Dorchester, a financial solutions group operating in the finance, insurance and savings, and investment service sector, has purchased a 25 percent stake in St Laurence Limited for $29.6 million.

In February, St Laurence signalled it was considering inviting a new strategic partner into the business after receiving several unsolicited approaches from interested parties.

St Laurence managing director Kevin Podmore said that the approaches followed the company’s substantial acquisitions in September 2006, which transformed it into a diversified funds management and finance business, and since then the subsequent new investment grade credit rating.

Effective today, Dorchester will own 25 percent of the shares in St Laurence Limited. To fund the transaction and as part of forming the new strategic partnership, the shareholder of St Laurence Limited, St Laurence Mortgage Holdings Limited will take a stake in Dorchester via the issue of 4,767,891 new shares in Dorchester Pacific Limited. This represents a 13.04% holding of total shares post-issue at a price of $2.05 per share, with the balance to be paid in cash.

St Laurence Limited managing director Kevin Podmore says St Laurence expects to be able to leverage both its expertise and Dorchester’s wider client base to further enhance its footprint in the financial services industry. “Dorchester has a diversified financial services business and a strong investor base, both of which will assist us in increasing our position and exposure in the market.”

“I am pleased to have Dorchester as a new strategic investor in St Laurence, and in turn to have acquired a significant stake in Dorchester,” Mr Podmore says. “We have been impressed with Dorchester’s direction under new chief executive, Andrew Walker, and look forward to working with Andrew and his management team.

“There are significant synergies to be realised through this transaction and we are excited about the opportunities it presents for St Laurence and Dorchester, both operationally and strategically. Both management teams are committed to working together, and in due course, will assess a number of future options for the companies including the potential for a full merger,” Mr Podmore says.

“Equally important, the cultural fit between the entities is very strong. At St Laurence our investors come first, and we have looked for a new partner that fits our culture and direction, provides synergies with our existing business and adds future value to our investors.”

Chief executive officer of Dorchester, Mr Andrew Walker, commented, “We are delighted with the opportunity to become a cornerstone investor in St Laurence. As previously stated, we have been looking to strengthen our position in funds and asset management, and the property finance markets, and we see this investment in experienced and respected operator St Laurence as providing us with a strong foothold in this sector.

“There are significant benefits for both companies from increased scale, distribution, geographical reach and product diversification, and management teams are committed to working together to realise these benefits,” Mr Walker said.

Dorchester has an option to acquire a further 25 percent in St Laurence Limited by March 2010.

Kevin Podmore will take up a position as a non-executive director on the Dorchester Pacific Limited board, and Dorchester chairman Barry Graham and chief executive officer Andrew Walker will both become non-executive directors on the St Laurence board.

ENDS
For further information, please contact:

St Laurence Group
Kevin Podmore
MD, St Laurence
Mob: 0212 732 723

Helen Mexted
GM, Funding & Corporate Services
St Laurence
Mob: 0212 88 7772

Dorchester Pacific Limited
Andrew Walker
CEO, Dorchester Pacific
Tel: 09 308 4950
Mob: 021 302 234

Jackie Fairbairn
spice communications group
Tel: 09 366 6100
Mob: 027 246 2505

NOTES:

Transaction Mechanics
As part of the transaction, Dorchester has the benefit of a call option to acquire a further 25 percent stake in St Laurence which is exercisable between 1 April 2008 and 28 March 2010 and a put option over its shares in St Laurence exercisable at the purchase price for such stake where profitability for the year ended 31 March 2007 does not reach agreed levels. The exercise of this call option is subject to any applicable regulatory or shareholder approval required at the time of exercise. In addition, St Laurence Mortgage Holdings Limited has an option, exercisable at any time until 30 April 2010, to buy-back Dorchester's then current shareholding, if a third party obtains control over in excess of 30% of the shares in Dorchester. Each of the call options is exercisable at a price determined by reference to a multiple of St Laurence's profit before tax.

St Laurence Limited

Australasian investment and finance group St Laurence has been active in property investment and finance markets since 1995, and in September 2006 created a substantial property-based funds management business under a single company, St Laurence Limited. As well as being a financially robust company with significant property-based assets and diversified income streams, an injection of new share capital significantly strengthened the company’s capital base. St Laurence focuses on four main areas of business activity - funds management, asset management, fund investment and property-based lending. The group manages more than $1 billion of assets for over 16,000 investors, and provides a range of property-backed fixed interest and other property-based investment products.

Dorchester Pacific Limited

Dorchester Pacific Limited is a financial solutions group, operating businesses in three divisions – Finance, Insurance and Savings, and Investment Services – and is listed on the New Zealand Exchange.

The Finance division provides finance for property, motor vehicles, equipment and personal loans on a secured basis to businesses and individuals across New Zealand. To fund its operations, the Finance group raises secured and unsecured deposits from investors under trust deeds and registered prospectuses.

The Insurance and Savings division offers a range of specialised insurance and savings products, including group life policies, reverse annuity mortgages (RAMs), savings plans, superannuation, funeral plans and individual investment plans.

Investment services provide investment advice to clients, including portfolio reviews, custodial services and product recommendations. In addition, resources from within the group and other sources are used to provide professional and innovative financial services to clients requiring capital.

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