Filed pursuant to Rule 424(b)(2)
(Form S-3 Registration Statement
No. 333-39383)
Prospectus Supplement [FINOVA logo]
(To Prospectus dated November 6, 1997)
1,421,587 Shares THE FINOVA GROUP INC.
Common Stock 1850. N. Central Ave.
P.O. Box 2209
Phoenix, Arizona 85002-2209
These shares are being sold by the On November 6, 1997, the closing price
Selling Shareowners named below in of our common stock on the New York
"Selling Shareowners." FINOVA will not Stock Exchange composite tape was $47
receive any of the proceeds from the 7/16/share.
sale of these shares.
The Underwriter has agreed to purchase The Underwriter proposes to offer
these shares from the Selling these shares for sale from time to
Shareowners at $47.266/share, for net time in negotiated transactions or
total proceeds to them of otherwise. The sale prices may be at
$67,192,731.14. or related to prevailing market prices
or at negotiated prices.
The Underwriter's obligation to For further information on the plan of
purchase is subject to certain distribution and any discounts,
conditions noted in the Underwriting commissions or profits on resale that
Agreement. For more information, see may qualify as underwriting discounts
"Underwriting" below and "Plan of or commissions, see "Underwriting"
Distribution" in the prospectus. below and "Plan of Distribution" in
the prospectus.
These shares have not been approved or
disapproved by the SEC or any state
securities commission.
None of those authorities has
determined that the prospectus or this
supplement is accurate or complete.
Delivery of the shares is expected on
Any representation to the contrary is November 13, 1997, subject to
a criminal offense. conditions, against payment in
immediately available funds.
Credit Suisse First Boston
November 6, 1997
<PAGE>
Certain persons participating in this offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities offered
under this supplement. Those transactions include over-allotment, stabilizing
transactions, short-covering transactions and penalty bids. For a description of
those activities, see "Underwriting." If begun, they may discontinue those
activities at any time.
SELLING SHAREOWNERS
The following table lists information by the Selling Shareowners, as of
about the shares owned and offered date of this prospectus.
<TABLE>
<CAPTION>
Shares
Common Stock Ownership Shares Being Owned After
Name of Selling Shareowner: Prior to the Offering Offered Offering
- -------------------------- ---------------------- ------------ -----------
<S> <C> <C> <C>
Belgravia Capital Corporation 1,339,932 1,119,932 220,000
Heller Financial, Inc. 207,858 207,858 0
R.J. Brandes(1) 93,797 93,797 0
</TABLE>
- -----------------------
(1) Reflects 70,348 shares held as trustee for Andrew Stone, who owns an
additional 2,200 shares of our stock individually, and 23,449 shares held as
trustee for William Pitofsky. Messrs. Stone and Pitofsky are Managing Directors
of the Underwriter. Since October 8, 1997, Mr. Brandes has served as Executive
Managing Director of FINOVA Capital Markets Inc., an indirect wholly-owned
subsidiary of The FINOVA Group Inc. ("FINOVA," "we" or "us").
UNDERWRITING
The Selling Shareowners and we prevailing market prices or at
have entered into an Underwriting negotiated prices. The Underwriter may
Agreement dated November 6, 1997 with effect those transactions by selling
Credit Suisse First Boston the shares to or through dealers.
Corporation, as Underwriter. The Those dealers may receive compensation
agreement provides that the in the form of underwriting discounts,
Underwriter will purchase the shares concessions or commissions from the
offered by this prospectus from the Underwriter and/or the purchasers of
Selling Shareowners and will purchase the shares for whom it may act as
all of these shares if any of them are agent.
purchased. The Underwriter need not
purchase any shares unless certain In connection with the sale of these
conditions are satisfied. The Selling shares, the Underwriter may be deemed
Shareowners and we have agreed to to have received compensation from the
indemnify the Underwriter against Selling Shareowners in the form of
certain liabilities under the underwriting discounts. The
Securities Act of 1933, or to Underwriter may also receive
contribute to payments which the commissions from the purchasers of the
Underwriter may be required to make shares for whom it may act as agent.
for those liabilities. The Underwriter and any dealers that
participate with the Underwriter in
The Underwriter advises us that it the distribution of the shares may be
proposes to offer the shares for sale deemed to be underwriters. Any
from time to time in one or more discounts or commissions received by
transactions (which may include block them and any profit on the resale of
transactions), in negotiated the shares by them may be deemed to be
transactions or otherwise, or a underwriting discounts or commissions.
combination of those methods. It may
offer the shares at market prices
prevailing at the time of sale, at
prices related to those
S-2
<PAGE>
The Underwriter may engage in positions. Penalty bids permit the
over-allotment, stabilizing Underwriter to reclaim a selling
transactions, short-covering concession from a dealer when the
transactions and penalty bids in securities originally sold by the
accordance with Regulation M under the dealer are purchased in a covering
Securities Exchange Act of 1934. transaction to cover short positions.
Over-allotment involves sales in Those activities may cause the price
excess of the offering size, which of the securities to be higher than it
creates a short position. Stabilizing would otherwise be. If commenced, the
transactions permit bids to purchase Underwriter may discontinue those
the underlying security so long as the activities at any time.
stabilizing bids do not exceed a
specified maximum. Short-covering
transactions involve purchases of the
securities in the open market after
the distribution is completed to cover
short
S-3
<PAGE>
Prospectus [FINOVA LOGO HERE]
1,711,269 Shares
The FINOVA Group Inc.
1850 N. Central Avenue
P. O. Box 2209
Phoenix, Arizona 85002-2209
These shares may be offered for sale FINOVA is registering these shares as
from time to time by certain required by the Registration Rights
shareowners listed below in "Selling Agreement we signed with the Selling
Shareowners." They may sell their Shareowners when FINOVA purchased
shares at their discretion. As a certain assets of Belgravia Capital
result, some or all of these shares Corporation.
may not be sold by the Selling
Shareowners. FINOVA's common stock is quoted on the
New York Stock Exchange under the
The Selling Shareowners, not FINOVA, symbol "FNV." The closing price quoted
will receive the proceeds from the an the NYSE's composite tape was
sale of these shares. FINOVA will pay $43.94/share on October 31, 1997.
all of the expenses of the
registration of these shares, The Selling Shareowners may offer the
estimated to be $175,000. securities directly or through
underwriters, agents or dealers. "Plan
The securities have not been approved of Distribution" below provides more
or disapproved by the SEC of any state information on this topic.
securities commission. None of those
authorities has determined that this
prospectus is accurate or complete.
Any representation to the contrary is
a criminal offense.
November 6, 1997.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and * Annual Report on Form 10-K for
current reports, proxy and information the year ended December 31,
statements and other information with 1996.
the SEC. You may read and copy any
document we file at the SEC's public * Portions of the Proxy Statement
reference rooms in Washington, D.C., on Schedule 14A for the Annual
New York, New York and Chicago, Meeting of Shareholders held on
Illinois. Please call the SEC at May 8, 1997 that have been
1-800-SEC-0330 for more information on incorporated by reference into
the public reference rooms and their our 10-K.
copy charges. Our SEC filings are also
available to the public from the SEC's * Quarterly Reports on Form 10-Q
web site at http://www.sec.gov. You for the quarters ended March 31,
may also inspect our SEC reports and June 30, and September 30, 1997.
other information at the New York
Stock Exchange, 20 Broad Street, New * Current Reports on Form 8-K
York, New York 10005. dated January 24, April 18, July
21, August 19, and October 17,
The SEC allows us to "incorporate 1997.
by reference" the information we file
with them, which means we can disclose You may request a copy of those
information to you by referring you to filings, other than exhibits, at no
those documents. Information cost, by contacting us at:
incorporated by reference is part of
this prospectus. Later information Treasurer
filed with the SEC updates and The FINOVA Group Inc.
supersedes this prospectus. 1850 North Central Avenue
P.O. Box 2209
We incorporate by reference the Phoenix, Arizona 85002-2209
documents listed below and any future (602) 207-6900
filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934
until this offering is completed:
FINOVA
The FINOVA Group Inc. ("FINOVA," provide value-added services enables
"we" or "us") is a financial services us to differentiate ourselves from our
holding company. Through our principal competitors. That expertise and
subsidiary, FINOVA Capital Corporation ability also enable us to command
("FINOVA Capital"), we provide a broad pricing that provides a satisfactory
range of financing and capital market spread over our borrowing costs.
products to mid-size businesses. We
concentrate on lending to midsize We seek to maintain a high
business. FINOVA Capital has been in quality portfolio and to minimize
operation for over 42 years. non-earning assets and write-offs. We
use clearly defined underwriting
We extend revolving credit criteria and stringent portfolio
facilities, term loans and equipment management techniques. We diversify
and real estate financing to our lending activities geographically
"middle-market" businesses with and among a range of industries,
financing needs falling generally customers and loan products.
between $500,000 and $35 million. We
operate in 16 specific industry or Due to the diversity of our
market niches under three market portfolio, we believe we are better
segments in which our expertise in able to manage competitive changes in
evaluating the credit worthiness of our markets and to withstand the
prospective customers and our ability impact of deteriorating economic
to conditions on a regional or national
basis. There can be no assurance,
however, that competitive changes,
borrowers' performance,
2
<PAGE>
economic conditions or other factors * Factoring Services offers
will not result in an adverse impact full service factoring and
on our results of operations or accounts receivable
financial condition. management services for
entrepreneurial and larger
We generate interest and other firms, primarily in the
income through charges assessed on textile and apparel
outstanding loans, loan servicing, industries. The annual
leasing, brokerage and other fees. Our factored volume of these
primary expenses are the costs of companies is generally
funding the loan and lease business, between $5 million and $25
including interest paid on debt, million. This line provides
provisions for possible credit losses, accounts receivable and
marketing expenses, salaries and inventory financing and loans
employee benefits, servicing and other secured by equipment and real
operating expenses and income taxes. estate.
Our principal offices are * Rediscount Finance offers
located at 1850 North Central Avenue, revolving credit facilities
P.O. Box 2209, Phoenix, Arizona to the independent consumer
85002-2209. Our telephone number is finance industry including
(602) 207-6900. sales, automobile, mortgage
and premium finance
LINES OF BUSINESS companies. Typical
transaction sizes range from
We operate the following $1 million to $35 million.
principal lines of business under
three market segments: Specialty Finance
Commercial Finance * Commercial Equipment Finance
offers equipment leases,
* Asset-Based Finance offers loans and "turnkey" financing
collateral-oriented revolving to a broad range of midsize
credit facilities and term companies. Specialty markets
loans for manufacturers, include the corporate
distributors, wholesalers and aircraft and emerging growth
service companies. Typical technology industries,
transaction sizes range from primarily biotechnology and
$500,000 to $3 million. electronics. Typical
transaction sizes range from
* Corporate Finance provides a $500,000 to $15 million.
full range of cash
flow-oriented and asset-based * Commercial Real Estate
term and revolving loan Finance provides term
products for manufacturers, financing for hotel, anchored
wholesalers, distributors, retail, office and
specialty retailers and owner-occupied properties.
commercial and consumer Typical transaction sizes
service businesses. Typical range from $5 million to $25
transaction sizes range from million.
$2 million to $35 million.
* Communications Finance
* Inventory Finance provides specializes in term financing
inbound and outbound to advertising and
inventory financing, combined subscriber-supported
inventory/accounts receivable businesses including radio
lines of credit and purchase and television stations,
order financing for equipment cable operators, outdoor
distributors, value-added advertising firms and
resellers and dealers publishers. Typical
nationwide. Transaction sizes transaction sizes range from
generally range from $500,000 $1 million to $40 million.
to $30 million.
* Franchise Finance offers
equipment, real estate and
acquisition financing for
operators
3
<PAGE>
of established franchise Capital Markets
concepts. Transaction sizes
generally range from $500,000 * FINOVA Realty Capital
to $15 million. specializes in providing
capital markets - funded
* Healthcare Finance offers a commercial real estate
full range of working financing products and
capital, equipment and real commercial mortgage banking
estate financing products for services. Typical
the U.S. health care transaction sizes range from
industry. Transaction sizes $1 million to $5 million.
typically range from $500,000
to $25 million. * FINOVA Investment Alliance
provides equity and mezzanine
* Public Finance provides debt financing for midsize
tax-exempt term financing to businesses in partnership
state and local governments with institutional investors
and non-profit corporations. and selected fund sponsors.
Typical transaction sizes Typical transaction sizes
range from $100,000 to $5 range from $2 million to $15
million. million.
* Portfolio Services provides FINOVA is a Delaware
customized receivable corporation. We were incorporated in
servicing and collections for 1991 to serve as the successor to The
time-share developers and Dial Corp's financial services
other generators of consumer businesses. Dial transferred those
receivables. businesses to us in March 1992 in a
spin-off. Since that time, FINOVA has
* Resort Finance focuses on increased its total assets from about
construction, acquisition and $2.6 billion at December 31, 1992 to
receivables financing of time $8.1 billion at June 30, 1997. Income
share resorts worldwide as from continuing operations increased
well as term financing for from $37 million in 1992 to $116.5
established golf resort million in 1996. We believe FINOVA
hotels and receivables ranks among the largest independent
funding for developers of commercial finance companies in the
second home communities. U.S., based on total assets. Our
Typical transaction sizes common stock is traded on the New York
range from $5 million to $35 Stock Exchange.
million.
* Transportation Finance
structures equipment loans,
leases, acquisition financing
and leveraged lease equity
investments for commercial
and cargo airlines worldwide,
railroads and operators of
other transportation related
equipment. Typical
transaction sizes range from
$5 million to $30 million.
4
<PAGE>
SELECTED FINANCIAL INFORMATION
The following information was items are part of our Annual Report on
derived from our financial statements. Form 10-K for the year ended December
Partial year results are not audited. 31, 1996 and our Quarterly Reports on
The information is only a summary and Form 10-Q for the quarters ended March
does not provide all of the 31, June 30 and September 30, 1997.
information contained in our financial You should read our financial
statements, including the related statements and other information that
notes, and Management's Discussion and we have filed with the SEC.
Analysis. Those
<TABLE>
<CAPTION>
As of and for the
Nine Months Ended
September 30, As of and for the Year Ended December 31,
------------ -----------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Dollars in thousands, except per share data)
0PERATIONS:
<S> <C> <C> <C> <C> <C> <C> <C>
Interest and income
earned from financing
transactions $ 682,920 $ 588,259 $ 797,934 $ 702,116 $ 474,200 $ 255,216 $ 243,337
Interest margins earned 326,487 271,538 369,105 309,084 227,463 124,847 104,699
Provision for possible
credit losses 48,300 31,164 41,751 37,568 10,439 5,706 6,740
Gains on sale of assets 22,407 8,442 12,949 10,889 3,877 5,439 3,362
Income from continuing
operations 100,330 86,097 116,493 93,798 73,770 37,846 36,750
Earnings from continuing
operations after preferred
dividends per common
and equivalent share* $ 1.79 $ 1.54 $ 2.08 $ 1.69 $ 1.46 $ 0.90 $ 0.85
Earnings per common and
equivalent share* $ 1.79 $ 1.52 $ 2.09 $ 1.75 $ 1.47 $ 0.89 $ 1.15
Dividends declared per
common share* $ 0.38 $ 0.34 $ 0.46 $ 0.42 $ 0.37 $ 0.34 $ 0.21
Average outstanding
common and equivalent
shares* 55,908,000 55,942,000 56,072,000 55,664,000 50,614,000 40,664,000 40,928,000
FINANCIAL POSITION:
Investment in financing
transactions $ 8,075,600 $ 7,058,306 $ 7,298,759 $ 6,348,079 $ 5,342,979 $ 2,846,571 $ 2,428,523
Nonaccruing assets 173,390 151,798 155,505 143,127 149,046 102,607 100,422
Reserve for possible
credit losses 167,754 144,293 148,693 129,077 110,903 64,280 69,291
Total assets 8,307,720 7,875,848 7,526,734 7,036,514 5,821,343 2,834,322 2,641,668
Total debt 6,502,512 6,350,043 5,850,223 5,649,368 4,573,354 2,079,286 1,898,773
Redeemable preferred
stock -- -- -- -- -- -- 25,000
Company-obligated
mandatory redeemable
convertible preferred
securities of subsidiary
trust solely holding
convertible debentures of
the Company 111,550 -- 111,550 -- -- -- --
Shareowners' equity 977,921 896,581 929,591 825,184 770,252 503,300 488,396
</TABLE>
*Retroactively adjusted for the two for one stock split effective October 1,
1997.
5
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any business strategy, the effect of
information incorporated by reference economic conditions, the performance
discuss future expectations, contain of our borrowers, actions of our
projections of results of operation or competitors and our ability to respond
financial condition or state other to those actions, the cost of our
forward-looking information. Known and capital, which may depend in part on
unknown risks, uncertainties and other our portfolio quality, ratings,
factors could cause the actual results prospects and outlook, changes in
to differ materially from those governmental regulation, tax rates and
contemplated by those statements. The similar matters, the results of
forward-looking information is based litigation, the ability to attract and
on various factors and was derived retain quality employees and other
using numerous assumptions. risks detailed in our other filings
with the SEC. We do not promise to
Important factors that may cause update forward-looking information to
the actual results to differ include, reflect actual results or changes in
without limitation, the results of our assumptions or other factors that
efforts to implement our could affect those statements.
SELLING SHAREOWNERS
We issued 1,711,269 shares of through a block trade through brokers
our common stock to Belgravia Capital we approve or in a private transaction
Corporation in partial payment for the not on a national securities exchange.
purchase of substantially all of Without one of those exceptions, those
Belgravia's assets. Immediately after Selling Shareowners cannot sell, in
the acquisition, Belgravia transferred the aggregate, more than 20% of our
to each of the other Selling average weekly trading volume for the
Shareowners the number of shares prior week.
listed below opposite their names. The
Selling Shareowners may sell from Selling Shares Offered
time to time up to the number of Shareowner Hereby
shares listed opposite their names. ----------- --------------
Under the terms of a Registration
Rights Agreement we entered into with Belgravia Capital
the Selling Shareowners, we agreed to Corporation 1,339,932
use our best efforts to register for Heller Financial, Inc. 207,858
offer or sale to the public the common R.J. Brandes(1) 93,797
stock issued to Belgravia and then the Brandes Program LLC 69,682
Selling Shareowners. The registration -------------
of these shares, however, does not
necessarily mean that all or any of (1) Reflects 70,348 shares of common
the common stock will be sold by the stock held as trustee for Andrew
Selling Shareowners. The shares of Stone, who owns an additional
common stock offered represent all 2,200 shares of common stock
shares of common stock owned by the individually, and 23,449 shares
respective Selling Shareowners. of common stock held as trustee
for William Pitofsky. Since
The Registration Rights Agreement October 8, 1997, Mr. Brandes has
restricts the ability of Belgravia served as Executive Managing
Capital Corporation, R.J. Brandes and Director of FINOVA Capital
the Brandes Program LLC to sell a Markets Inc., an indirect wholly
large volume of these shares, except owned subsidiary of FINOVA.
6
<PAGE>
USE OF PROCEEDS
We will not receive any of the Those proceeds will be paid to the
proceeds from the sale of the common Selling Shareowners.
stock offered through this prospectus.
PLAN OF DISTRIBUTION
The Selling Shareowners may stock to a broker-dealer and the
sell the common stock from time to broker-dealer may sell the loaned
time. The Selling Shareowners may common stock. Upon a default, the
make these sales on exchanges or in broker-dealer may sell the pledged
the over-the-counter market or common stock pursuant to this
otherwise, at prevailing prices or in prospectus.
negotiated transactions. The common
stock may be sold by: (a) a block Broker-dealers or agents may
trade in which the broker-dealer will receive compensation in the form of
attempt to sell the common stock as commissions, discounts or concessions
agent but may resell a portion of the from Selling Shareowners in amounts
block as principal to facilitate the to be negotiated in connection with
transaction; (b) purchases by a the sale. These broker-dealers and any
broker-dealer as principal and resale other participating broker-dealers may
by that broker-dealer for its account be considered "underwriters" under the
pursuant to this prospectus; (c) an Securities Act of 1933, as amended, in
exchange distribution under the rules connection with those sales. Any
of that exchange; and (d) ordinary commission, discount or concession
brokerage transactions and they receive may be considered
transactions in which the broker underwriting discounts or commissions
solicits purchasers. In effecting under that Act.
sales, broker-dealers engaged by the
Selling Shareowners may arrange for The Selling Shareowners may
other broker-dealers to participate in agree to indemnify any broker-dealer
the resales. In addition, any common or agent that participates in
stock that qualifies for sale under transactions involving sales of the
Rule 144 may be sold under Rule 144 common stock against certain
rather than pursuant to this liabilities, including liabilities
prospectus. arising under the Securities Act of
1933.
The Selling Shareowners may
also sell common stock short and There is no assurance that any
redeliver the common stock to close of the Selling Shareowners will offer
out these short positions. The Selling for sale or sell any or all of the
Shareowners may also enter into common stock covered by this
option, hedging or other transactions prospectus.
with broker-dealers which require the
delivery to the broker-dealer of the
common stock. The broker-dealer may
resell those shares pursuant to this
prospectus. The Selling Shareowners
may also loan or pledge the common
LEGAL MATTERS
William J. Hallinan, Esq., Senior the common stock offered through this
Vice President-General Counsel, or prospectus. Brown & Wood LLP will
Richard Lieberman, Esq., Vice serve as counsel to any underwriters
President-Assistant General Counsel of or agents, unless otherwise noted in a
FINOVA, will pass on the legality of supplement.
EXPERTS
Deloitte & Touche LLP, independent ended December 31, 1996. The financial
auditors, have audited the financial statements are incorporated into this
statements for FINOVA incorporated in Prospectus by reference in reliance
this Prospectus by reference from our upon their report given upon their
Annual Report on Form 10-K for the authority as experts in accounting and
year auditing.
MISCELLANEOUS
You should rely only on the any jurisdiction in which the making
information contained in this document of an offer to sell or a solicitation
or that we have referred you to. We of an offer to buy would not be
have not authorized anyone to provide authorized. Additionally, this
you with information that is document is not an offer to sell or a
different. This document is not an solicitation of an offer to buy common
offer to sell or a solicitation of an stock to anyone to whom it would be
offer to buy common stock by anyone unlawful to do so.
not qualified to do so or by anyone in
7
<PAGE>
You should rely only on the [FINOVA logo]
information contained in or
incorporated by reference in this
prospectus or the supplement. We have
authorized no one to provide you with
different information.
THE FINOVA GROUP INC.
We are not making an offer of these
securities in any location where the
offer is not permitted.
1,421,587 Shares
You should not assume that the
information in this prospectus or in Common Stock
the supplement, including information
incorporated by reference, is accurate
as of any date other than the date on
the front of the prospectus or
supplement, as applicable.
PROSPECTUS SUPPLEMENT
---------------
TABLE OF CONTENTS
Page
----
Prospectus Supplement
Selling Shareowners ...............S-2
Underwriting ......................S-2
Prospectus
Where You Can Find More
Information .......................2 CREDIT | FIRST
FINOVA ..............................2 SUISSE | BOSTON
Selected Financial Information ......5
Special Note Regarding Forward-
Looking Statements ................6
Selling Shareowners .................6
Use of Proceeds .....................7
Plan of Distribution ................7
Legal Matters .......................7
Experts .............................7
Miscellaneous .......................7
