Geneva Finance revises up 2011 loss after FMA halts securities allotment

By Paul McBeth

July 15 (BusinessDesk) – GFNZ Group, formerly Geneva Finance, says its latest loss is bigger than previously reported after it wrote off a tax asset that irked the financial markets regulator.

The lender, which has convinced investors to buy into three deferred repayment plans, made a loss of $8.6 million in the 12 months ended March 31 after it wrote off a $2.4 million deferred tax asset, it said in a statement.

The recognition of that asset fell foul of the Financial Markets Authority, which froze the allotment of securities in GFNZ’s latest moratorium scheme, saying the lender breached its new minimum lending covenant. The breach has since been waived by its bankers.

Last month GFNZ said profit was $6.2 million in the period on a 35% slump in revenue to $15.5 million.

GFNZ went back to debt holders in March seeking agreement to swap debentures and notes in exchange for control of the company by trebling the shares at 5 cents apiece. That would be the third capital reconstruction for the company, after note holders accepted a six-month moratorium in November 2007 as a better offer than winding up the lender.

Since then, they agreed to convert 55% of the notes to shares at 36 cents apiece, and were paid 13.25% interest on their remaining notes.

GFNZ entered a moratorium in November 2007 owing some $132.4 million to investors and owes just $25.8 million to debenture holders as at March 31.

The shares last traded at 2.5 cents apiece on July 1, valuing the company at just $4.5 million.

(BusinessDesk)

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