17 Jul 2013

Finance firm to exit moratorium

8:30 am on 17 July 2013

Finance firm GFNZ is exiting its moratorium one year and five months early, having repaid its investors all their capital as well as interest at a rate of more than 11%.

The firm, formerly Geneva Finance, is one of the few finance companies to have survived and the only one to have paid interest in addition to returning investors' capital.

GFNZ has secured a $30 million debt facility from Westpac Bank, a $5 million loan from a group of professional investors including two of its non-executive directors, and another $5 million loan from major shareholder Federal Pacific Group.

These funds, in addition to the company's cash on hand, mean all outstanding debt will be repaid on 1 August and the company will formally exit the moratorium on 5 November, six years after it began.

Since that time, the company has paid $169 million in principal and interest, including $107.4 million to its public debenture holders.

Managing director David O'Connell says getting to this point has meant a lot of hard work and, when the moratorium began in November 2007, nobody was forecasting one of the worst recessions in New Zealand's history.

The company will hold a meeting of shareholders to approval the three loan transactions.