GFL
27/08/2012 13:02
GENERAL
REL: 1302 HRS GFNZ Group Limited
GENERAL: GFL: GFNZ GROUP ANNOUNCES $3m PROFESSIONAL INVESTOR FUNDING
Media Release 27 August 2012
GENEVA FINANCE ANNOUNCES SUCCESSFUL $3.0M FUNDING FOR ITS PROFESSIONAL
INVESTOR FUNDING PRODUCT
NZAX-listed auto loan provider GFNZ Group Ltd (Geneva) has s successfully
placed $3.3m of new business receivables into a Prime Asset Trust Limited
funding scheme, using this security to raise a total of $3.0m of new debt
funding from its cornerstone investor, Federal Pacific Group Limited. This
placement will assist Geneva in maintaining its track record of early
repaying its scheduled debt repayment program and provide funding for the
expansion of its profitable new business model.
Prime Asset Trust Limited Scheme:
Responding to a difficult funding market, Geneva developed a funding product
that offers a highly secure, high cash flow, investment opportunity to
investors. The key features of this product are:
oIt is only available to professional investors. i.e Investors who qualify as
"eligible persons" per section 5(2CD) or section 5(2CE) of the Securities Act
1978 may subscribe for these investments.
oThe financing structure is completely independent of Geneva, i.e. Whatever
course Geneva takes in the future these receivables and the cash flows they
generate are exclusively for the benefit these investors,
oGeneva retains a subordinated position of up to 20% in the receivables but
receives no cash from the investment until all investors principal and
interest is repaid in full.
Managing Director, David O'Connell says, "This is an innovative product where
getting the first tranche away is the challenge, once investors see how this
investment performs, we expect there will be ready appetite among the
professional investor community, who will appreciate both the security the
structure offers and the high yield of circa 9.0%."
Debenture Repayment ahead of timetable:
The board has also approved the further repayment of $2.5m on Friday 31st
August, four weeks ahead of schedule. This announcement maintains Geneva's
record of early repayment, following on from the early repayments of the
September 10, March 11, September 11 and March 12 scheduled debenture
principal repayments.
This repayment is being made under Resolution 1.4(b) of the Interest Bearing
Repayment Plan to repay Moratorium Debenture holders and BOSIAL early, either
in full or in part on a pro rata basis.
Inclusive of this payment, Geneva Finance has repaid $132.8m of investor
principal and interest payments since the Company entered moratorium in
November 2007 owing a net $132.4m to investors. These repayments are
inclusive of interest payments to investors (including the company's bankers)
of $38.9m at a weighted average interest rate of 10.7% and principal
repayments to public debenture holders totaling $68.3m
Revisit Shareholders Rights issue:
As announced on 14th August, the board will be revisiting the timing of the
rights issue and expect to make an announcement in early October. "The board
felt it was important to settle this $3.0m funding tranche before proceeding
to the rights issue". Says David O'Connell, "We have set ourselves a series
of milestones to achieve and are committed to completing them in sequence
before moving to the next step. Finalisation of the debt placement took
longer than expected, that was the reason for deferring the Rights Issue and
now the debt placement has occurred, we can revisit the rights issue in early
October"
Achievements to date:
While there are many challenges facing the company and the sector, the
board's commitment to the core strategy remains unchanged. This debt funding
initiative is another step forward and a significant achievement for Geneva
which to date includes:
oRepayment of more than $132.8m of debt funding to investors (including
interest of 11.0% per annum to public debenture holders);
oReducing group operating costs by more than $29m per annum since October
2007;
oAcquiring the Quest Insurance and Stellar debt collection operations to
complement core financing activities;
oImplementing real time online internet-based scorecards and loan application
systems for introducers;
oRestructuring operations to allow the new business model to focus on a
market segment that offers attractive yields that carry considerably less
risk.
ends
About Geneva
Geneva is a New Zealand-owned finance company that provides finance and
financial services to the consumer credit and small to medium business
markets. Geneva commenced business on 7 October 2002. Geneva's loans are
originated through three distribution channels (Direct, Broker and Dealer),
processed by the central sales desk then administered through a national
operations centre located at Mt Wellington, Auckland.
The company borrows money by the issue of debenture stock. It also has a
banking facility with BOS International (Australia) Limited.
Geneva (GFL) is listed on the NZAX. There are 224,698,631 issued shares held
by 2,629 investors.
About Federal Pacific
FedPac's operations throughout the Pacific region include investments in
Banking, Personal and Business Finance, Money Transfer and Foreign Exchange
Trading. The company was incorporated in 1993 and is based in Auckland, New
Zealand.
Alexander Communications
Kate Alexander
+64 (0)27 244 6094
[email protected]
For further information:
End CA:00226498 For:GFL Type:GENERAL Time:2012-08-27 13:02:42
(20min delay)