Investor vote wins reprieve for Geneva

Investor Ross Lockyer questions the Geneva Finance board at the meeting in Auckland yesterday. Photo / Brett Phibbs

Almost every stakeholder in Geneva Finance voted in favour of a proposal yesterday to delay capital repayments to ensure the immediate survival of the company.

But some investors had concerns about whether the company would be able to meet its promises.

One hundred per cent of Geneva's noteholders and 99 per cent of debenture holders voted in favour of the board's proposal to delay repayments by two .

Debentureholders have received 50 per cent of their capital back. They will have to wait until March 2015 to receive the rest of their money. This was originally scheduled to be paid back by September 2012.

Noteholders will have to wait until April 2015 to receive around 85 per cent of their money back. This was scheduled to be repaid before October 2012.

The move has saved the company from receivership for now and will allow it to continue operating in moratorium.

Although Geneva has around 3000 investors less than 100 appeared to vote in person at the meeting held in Auckland yesterday.

Retired debentureholder Ross Lockyer said his main concern was the company's bank BOS International reducing its lending facility from $35 million to $30 million. Geneva will still have to make six monthly repayments until the loan is repaid in March 2015.

Lockyer said he and his friends wanted Geneva to succeed in its restructuring plans instead of a receivership but he has doubts.

"We want it to succeed, we want our shares to be worth something. But in this economic climate they would have to be magicians to make it work."

Geneva chairman David Smale told investors: "This is not a place you want to be and I assure you this is not a place we [the board] want to be either."

Smale added the company had a "good working relationship" with BOS.

Smale said the global downturn had placed finance institutions under the spotlight during a very challenging time.

He said the company was also concerned with the wider issues of a receivership such as job losses and the effect that would have on families depending on Geneva.

Geneva managing director David O'Connell said if the company was successful all investments would be repaid and shares would have a value.

O'Connell added Geneva had paid interest - 11 per cent for debentureholders and 13 per for noteholders - every month on time.