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The future of consumer finance company Geneva Finance is hanging in the balance as it waits for a decision from its bankers on whether they will continue to support the company or send it to the receivers.
Yesterday the board of Geneva Finance faced shareholders in its first annual meeting since listing in July as part of a restructuring plan to save the company from going under.
Geneva revealed last month it had breached its covenants with BOS International, a division of Britain's Halifax Bank of Scotland, and was in talks with it.
Yesterday managing director David O'Connell said he hoped to hear back within two to three weeks but did not want to push the bank for fear it would turn around and say no.
Initially O'Connell said there was no Plan B. If BOS did not come to the party the company would go to the receivers.
But he later said there were other options that the company could look at but not until after BOS had made its decision.
Until it has the BOS decision Geneva cannot apply for the Government's deposit guarantee scheme as it would not pass the requirements in the current circumstances.
BOS, which has loaned $35 million to Geneva, is itself facing an uncertain future.
Its owner, HBOS, is expected to be bailed out by rival Lloyds TSB through a £12 billion ($32 billion) injection backed by a guarantee from the British Government.
Rumours in the British press this week said Bank of China might be interested in buying HBOS.
One investor asked what hope there was of success in securing the BOS backing given its situation.
Chairman Brian Walsh said it was the bank's call.
"The relationship we have developed is one of trust. The body language they are giving leaves us with a high degree of comfort."
The company still had equity of $22 million and made a profit of between $1 million and $2 million a year.
But Shareholders Association chairman Bruce Sheppard poured cold water on the positive stance. "It's very hard to predict what a bank can do."
He suggested investors consider putting more of their own money into the business to shore up its equity and allow it to keep operating in a moratorium. Sheppard believed the company was worth about 25c a share but said investors could end up with nothing if it went to the receivers.
Some shareholders shouted down the suggestion but Walshe said it was something the company would consider - after the BOS decision.
Shareholders have so far had 25 per cent back in capital and interest. A further payment is due in March.
Before the meeting Geneva had been criticised by the Shareholders Association for failing to represent its shareholders and a motion was put to the meeting calling for the resignation of directors David O'Connell, Peter Francis and Walsh.
But Sheppard withdrew it at the last minute after Geneva shareholders criticised the association during the meeting for interfering.
"I deem this as a slur on the shareholders and the board," one shareholder said.
Geneva Finance last traded at 7c a share.
GENEVA FINANCE
* 4000 investors.
* Owes $138 million.
* 25 per cent paid back already.
* BOS International owed $35 million.
