Federal Pacific Group, a financial services group with ties to Ireland's Fexco, has taken a cornerstone stake in GFNZ Group, formerly known as Geneva Finance, and arranged new funding lines for the vehicle lender.
FedPac has taken 19.9 per cent of GFNZ, paying $1.2 million, or 2.75c apiece, for 45 million shares. That's a premium of 112 per cent to the current trading price of 1.3c per share. GFNZ will also make a pro-rata rights issue to shareholders at the same price.
The Auckland-based firm has also arranged additional funding lines to help grow GFNZ's loan book and help refinance the company's debt. GFNZ breached its banking facility covenants twice during the six months ended September 30 when it narrowed its first-half loss to $264,000.
"FedPac's support will enable us to fast-track the new business model expansion while maintaining our scheduled debt repayment plan," managing director David O'Connell said in a statement. "Geneva is operating in a market that has seen many competitors fall away and we see the expansion of the profitable new business model into this space as the key to putting the group on to a long-term and sustainable profitable platform."
The lender has been one of the more successful financiers to survive the sector's collapse, and has repaid $121 million of debt and interest to investors.
