KEY POINTS:
Bluestone's late bid to purchase stricken finance company Geneva's loan book for 85c in the dollar is an attempt to "destabilise" next week's investor vote on the company's future, management says.
The Australian mortgage lender says its proposed purchase of Geneva's book would benefit debenture holders by giving them an "upfront consideration" and would eliminate the "operational risk" involved in Geneva's own restructuring proposal.
Geneva's investors meet in Auckland next Monday to vote on whether to accept the management restructuring proposal which would see 15 per cent of debenture investors' principal converted to new shares in the company, with the balance plus interest repaid over the next 53 months.
At present the only alternative to this when the company's six month moratorium ends two days afterwards is receivership. Bluestone chairman Alistair Jeffery wants investors to also be given the option of voting for what is effectively an extension of the moratorium for a further four weeks in order for his firm to conduct due diligence. But Geneva chief executive Shaun Riley said the "apparent leaking" of Bluestone's expression of interest to the media this week "is no more than an effort to destabilise the vote".
Riley said Geneva was "happy to look at any proposal" after next week's vote, but Bluestone's "expression of interest", registered on April 9, was received too late to put to investors at the meeting.
Riley said Bluestone first approached Geneva six weeks ago but subsequently advised the company it did not want to proceed, "so it came as some surprise when we got an expression of interest on April 9".
Bluestone says Geneva's subordinated note holders would likely receive nothing under its proposal.
