Sharechat Logo

Geneva survives meeting vote

Tuesday 6th November 2007

Text too small?
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.

Debenture holders yesterday voted in favour of a moratorium to extend the maturities of all investments for an additional six and a half months.

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."

For more of the week's top news stories for financial advisers. Visit

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Sky CEO put on notice by chunky vote against salary share scheme
Unions gearing up to oppose 'market tests' on Fair Pay Agreements
Mandatory farm plans scorned as 'tick box' exercises
Kiwi dollar firms on weak US retail data, capped by rate-cut expectations
17th October 2019 Morning Report
SkyCity hoses down union claims over potential job losses
OPINION: Fair Payment Agreements and 'swallowing vomit' - the lot of the CTU
MARKET CLOSE: NZ shares gain; Restaurant Brands climbs on upbeat outlook
NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals

IRG See IRG research reports