O'Connell said winding down the business in order to meet the payment to BOS International by its due date would have "damaged the business' operational capability and put full repayment of principal and interest to debenture holders, BOS, and sub note investors at risk."

Geneva reached agreement with its banker, BOS International, that its current $35 million facility would be reduced to $30 million at the end of March and continue to fall by $5 million lots every six months until March 31 2015, when it would be zero.

Last month the first finance company to go into a moratorium announced its future was uncertain after its wholesale funder warned it was unlikely to extend its $35 million facility with Geneva beyond the end of April. As at September 30, the finance company had drawn down some $26.8 million from the facility.

Under the terms of the proposal, debenture holders whose repayments were reset as part of the April 2008 capital reconstruction are being asked to defer about half of their rescheduled repayments, but will continued to receive interest on their investment, while note holders are being asked to put off their repayment to October 13 through April 15 and will also receive interest. Debenture holders who have placed funds with Geneva since April 28 2008 will not have any changes to the terms of their investment.

The plan will require the approval of both debenture and sub note holders, with meetings to be held at the end of March.

The finance company will be able to make early repayments to debenture holders and BOS International on a pro rata basis, but will require approval from their banker and trustee to make early repayments to note holders.

Geneva Finance has been one of the more successful finance companies to enter into a moratorium arrangement repaying debenture and note holders some $64.4 million since November 2007.

The company posted a first-half loss of $2.6 million, compared to a $7.7 million loss a year earlier, and has largely completed its shift away from high interest rate, high risk products.