Geneva survives meeting vote
Geneva Finance has staved off receivership and had its Standard and Poor's credit rating increased two notches from D to CC Credit Watch developing.
Monday, November 5th 2007, 11:56PM
Under the deal all interest on all classes of investments will be paid monthly during the period and no new investments will be accepted, however Geneva will continue to trade and lend.
Geneva chief executive Shaun Riley told Good Returns debenture holders at the meeting were overwhelmingly supportive of the company.
He says "our investors" have been with us for a long time and are extremely supportive.
The resolution required a 75% majority to pass. It, reportedly, did that comfortably, however Riley was uncertain what the final voting figures were.
"The no vote was immaterial," he says.
Geneva outlined to investors a new business model designed to build up cash reserves and reduce costs.
The company is closing branches and centralising its operations.
Riley acknowledges there has been criticism of this strategy but points out that some big finance companies, past and present, have successfully run centralised operations. He includes in this list UDC, AGC (before it was sold) and Pacific Retail Finance.
Also Geneva will be monitored on behalf of the trustee, by a third party, Ferrier Hodgson, to ensure compliance with the terms of the moratorium.
Riley says various undertakings relating to things like cash collected have been given. However he won't disclose these as they are "commercially and competitively sensitive information."
On the vexed question of providing information to debenture holders Riley strongly expressed the views that only audited information should be provided to investors.
Some information was provided to meeting attendees he said. S&P is still unsure about the company and is seeking clarity on various issue.
"The CreditWatch will be resolved at the time when greater certainty can be established regarding the company's credit-risk profile. Resolution of the CreditWatch listing, which is expected to be within the next month, will hinge mainly on Standard & Poor's analysis concerning Geneva's operating activities, including cash flow management, and future business and recapitalisation plans."
| « Investment rates continue to rise | Fidelity says interest payment maybe postponed » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
