GE Capital who partner with consumer lending group GE Money who are a major supplier of finance to Harvey Norman and several other consumer electronics retailers could face a major funding cut after racking up losses of $263 million.
GE Capital who partner with consumer lending group GE Money who are a major supplier of finance to Harvey Norman and several other consumer electronics retailers could face a major funding cut after racking up losses of $263 million.
Currently under investigation by the Australian taxation office GE is facing the real prospect of pulling out of the Australian market.
According to the Australian newspaper the company has reported a loss of $63.7m for the first half of 2009, compared with a $24.7m loss for the previous first half, while revenue was down 42 per cent to $1.16 billion.
In a report filed to the Australian Securities Exchange, the company declared a $2.28bn deficiency in net current assets as at June 30, with accumulated losses of $263.8m.
The Australian reported that Company directors said GECA’s financial position “indicates an uncertainty that the consolidated entity can continue as a going concern in the foreseeable future”.
A partner to several retailers with their 36 and 48 month interest free offers GE Money and GE Capital have been told that they have to trade their way out of trouble or their US parent will pull the plug on the Australian operation say insiders.
It appears that the company’s US parent, engineering and financial conglomerate General Electric, has brought forward the deadline for its Australian subsidiary to trade its way out of trouble.
Early in 2009 GE Money and business lender GE Commercial Finance were merged while sacking 400 staff. This came on top of 350 sackings in 2008.
GECA has also revealed that the Australian Taxation Office is auditing its tax returns going back several years. “The taxation authority is currently reviewing the income tax returns submitted in previous reporting periods,” the report said.
