Geneva Finance One For Four Rights Issue

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NZAX-listed auto loan provider GFNZ Group Ltd (Geneva) having successfully placed $1.2m of ordinary shares to Federal Pacific Group Limited (FedPac) in March 2012, advises that its 1:4 rights issue, raising a further $1.5million of equity has settled.

This equity placement, further strengthens Geneva’s balance sheet and represents another milestone in the company’s development, which over the last four years, has seen Geneva work hard to reposition and rebuild its operations. Other significant milestones include:

Repayment of more than $133.3m of debt funding to investors (including interest of 11.0% per annum to public debenture holders);

  • Reduced group operating costs, since November 07, by more than $29m per annum;
  • Acquisition of the Quest Insurance and Stellar debt collection operations to complement core financing activities;
  • Implementation of online internet-based scorecards and loan application systems for introducers;
  • Restructure of its operations to allow the new business model to focus on a market segment that offers attractive yields that carry considerably less risk.

Geneva Managing Director David O’Connell says: “The $1.2m placement in March 2012, and the $1.5m raised under this issue have collectively increased Geneva’s net shareholders funds by 28%. This is another significant step forward. It will assist the company source the new funding lines, core to expanding the new business model while maintaining our scheduled debt repayment program.”

Under the rights issue Geneva has issued a further 56.2 million ordinary shares, of which 357 small shareholders were allocated 6.6m on the 19th November. FedPac were allocated the remaining 49.6m shares today, raising it’s total stake in Geneva to 33.7%.

Each of the shareholders (including FedPac) who acquired shares under the rights issue, has also been allocated two options (for every three shares acquired) to subscribe for new shares, at 8.00 cents per share within a 30 day period commencing three years after their allocation date.

The rights issue and FedPac’s underwrite agreement were approved at the shareholders meeting held on 6th November 2012.