Geneva posts $7.7m loss
Geneva Finance, the finance company that won support from investors for a debt-for-equity swap to stave off collapse, posted a first-half loss because of increased provisions for bad debts.
Thursday, January 8th 2009, 4:05PM
by Jonathan Underhill
The loss in the six months ended September 30 was $7.7 million, from a loss of $100,000 a year earlier, the company said in its first-half report.
“We are experiencing once in a life time changes to financial markets on both the global stage and within New Zealand,” it said. “It is difficult to know the extent to which the current recession will impact the company’s performance, both in terms of collecting receivables (particularly the “old ledger”) and sourcing of new lending.”
Geneva has divided its loan book in two, with the new ledger comprising people with better credit records and the old made up of lower quality loans. The first half loss includes $9.4 million of additional provisions for the old loan book.
As at September 30, old ledger loans were $43.7 million, or 43% of the total. The company has a moratorium on some $138 million of deposits from 4,000 investors.
The company breached its bank covenants in September, and subsequently said had reached agreement with BOS International over its $35 million facility.
The firm posted a $7.9 million loss in the 12 months ended March 31, 2008, after closing its branch network to cut costs.
Geneva was under threat of having its stock suspended by NZX Regulation last month after failing to file its first-half results by the December 14 due date. The shares last traded on December 11 at 7 cents.
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