Published 1 July 2011
GFNZ Group Ltd (ex-Geneva Finance Ltd) said yesterday its banker, BOS International (Australia) Ltd, had waived the breach of a minimum new lending covenant.
When GFNZ released its financial results for the March year on 14 June, it said it was in breach of that covenant, but added: “The lending covenant was developed as a measure of the sustainability of medium/long-term profitability forecasts rather than a substantive measure of BOSIAL’s security position.”
Although the company played the breach down, the Financial Markets Authority reacted on 15 June by making an interim order stopping GFNZ from allotting securities.
The Financial Markets Authority said its action was in the public interest because the prospectus related to a continuous offer of debt securities. The authority’s chief executive, Sean Hughes, said: “It is vital that existing & prospective investors have sufficient information about the company to make an informed assessment of their investments.”
GFNZ also said yesterday its directors had resolved to take a more conservative approach in reporting the group’s financial position and write off a deferred tax asset after the auditors had emphasised their concern in their statement with the annual accounts.
The directors said this write-off – a non-cash transaction – would add $2.4 million to the company’s after-tax loss.
3 February 2011: Geneva makes early moratorium repayment
8 October 2010: Geneva tops $100 million in post-moratorium repayments
1 February 2010: BOSIAL tells Geneva full funding unlikely to be extended
15 June 2008: Geneva reports $7.9 million loss, backing slips to 34.7c
15 April 2008: Geneva Finance puts reconstruction to investors
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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.