VenFin is concerned that this week`s boardroom drama at Intervid will disrupt the turnaround process at the company in which it has a 17% shareholding.
Monday saw the resignation of Intervid non-executive chairman Bill Lambert, CEO Mark Taylor, financial director Wayne Jaggard and non-executive director Johann Pieterse at a special meeting called to vote on Lambert`s removal.
Intervid has stressed, however, that both Taylor and Jaggard are staying on as employees of the company, even though they are no longer on the board.
The meeting had been called by major shareholders the Howard family - represented through three family trusts - who had expressed dissatisfaction with what they saw as undue influence by VenFin at board level.
Intervid said last night it had appointed Rob Howard as executive chairman.
"The new Intervid board is seeking continued finance from our existing bankers," the company says. The directors also plan to sell "certain assets" to raise capital.
The previous board had been in talks with VenFin regarding the refinancing of Intervid.
VenFin owns not only the 17% direct shareholding, but also an indirect stake through a convertible bond held by associate RFS Holdings, the company`s principal loan creditor.
Intervid has been in talks with RFS Holdings regarding the capping of the number of shares that may have to be issued to it when the loan is converted into shares, as well as the continued access to funding in SA from Intervid International.
The former board said in its commentary on the results for the six months to end-December that VenFin had agreed to a loan of R21 million to R40 million, but on condition that the meeting to vote for Lambert`s removal not take place.
VenFin says that, among other things, RFS had been willing to consider limiting its conversion rights provided in the convertible bond to 65% of Intervid`s issued share capital, although the Howard Family did not support this and other proposals by VenFin.
"VenFin will continue to evaluate all alternatives available to it in respect of its investment in Intervid," it says.
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