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Technology Stocks : Geo2 Ltd. Green technologies
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To: richard badauskas who started this subject11/29/2000 4:50:59 PM
From: Henrik   of 70
 
Geo2 races to save itself By JOHN PHACEAS 30nov00

RECEIVERS could be called in to failed environmental technology group Geo2 as early as next Tuesday unless administrators can come up with an 11th-hour rescue package.

Geo2 put itself into voluntary administration on Tuesday of last week, after cash reserves dwindled to just $40,000, and accumulated debts topped $4 million.

The appointment came a month after efforts to implement a $3.5 million rights issue stalled, forcing Geo2 to negotiate an emergency $1.5 million secured loan at a stellar interest rate of 36 per cent.

At a wake-like annual general meeting in Melbourne yesterday, administrator David Lockwood said a receiver could be called in within 10 days of the company being put into administration if a "commercial arrangement" was not put to the loan providers.

"Needless to say, any reconstruction proposal might potentially see conversion of some of these creditors into equity . . . and shares being consolidated down into a lower value," he said.

But any such deal is likely to receive only grudging acceptance from angry shareholders, who have pumped more than $20 million into the company in two years, but have seen the share price collapse from 69c in March to 6c when trading was suspended last week.

The terms of the secured loan mean the additional equity will be issued to four companies associated with former executive directors Charles Laycock and Charles Hider, who quit in June after Geo2 racked up net operating losses of $26 million in the previous two years.

Both men were blasted yesterday, as shareholders asked why Geo2's financial problems were not addressed sooner, and why substantial "directors exit fees" had been paid.

SOURCE:
finance.news.com.au
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