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| Subject: Answers to questions. | |
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Author: Deferred cash settlement-38.7 million. 30/6/01 to 30/6/02 |
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Date Posted: Monday, January 27, 01:06:05am Reading through the exploratory Memo I notice that when ERG acquired Proton it was a scrip and cash tranaction. 75.5m shares were issued. A further cash payment has to be made in the event ERG shares went down... when the share price was $.30 the payment was $38m What is it now? -----------------------------------------------------------G'day Michael, ----------------------------------------------------------- As a basic item ERG will owe $28Million to Amex, visa and Interpay if the shares are valued at 65 cents by the market. For every 10% fall from 65 cents ERG owe an additional $3Million.For every 10% rise from 65 cents ERG pay $3Million less. ----------------------------------------------------------- Following occurs when ERG shares fall: 58.5 cents - ERG owe $31Million 52 cents - ERG owe $34Million 45.5 cents - ERG owe $37Million 39 cents - ERG owe $40Million 32.5 cents - ERG owe $43Million 26 cents - ERG owe $46Million 19.5 cents - ERG owe $49Million 13 cents - ERG owe $52Million ----------------------------------------------------------- So ERG will owe between $52-49Million currently if they allow these companies to sell. A bit like shooting yourself in the foot. (not that ERG have done that in the last year - lol) ----------------------------------------------------------- However, ERG does not have to worry about this until three years as the share price performance payment is not due until the shares are sold. Amex, Visa and Interpay are not allowed to sell shares for three years unless authorised by ERG. Banksys can sell shares after two years, but looking into the fine print the performance agreement does not apply to their shares. ----------------------------------------------------------- Best of Luck Lost ----------------------------------------------------------- Notes below from the prospectus provided. ----------------------------------------------------------- Following from page 49, point 7.3.4: This additional payment would amount to approximately $28 million based upon an ERG share price of 65 cents (the price at the time of preparation of this Prospectus) in three years’ time. For example, the contingency would increase to approximately $31 million if ERG’s share price falls by 10% and would decrease to $25 million if ERG’s share price rises by 10%. The contingency will be reassessed annually and disclosed in the ERG financial statements but is not expected to have any profit and loss impact. ------------------------------------------------------------ pg 23, 4.2.2 ------------------------------------------------------------ These shares are subject to restrictions on trading without ERG approval for three years in the case of Amex, Interpay and Visa and for two years in the case of Banksys. ------------------------------------------------------------ [ Next Thread | Previous Thread | Next Message | Previous Message ] |