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| Subject: Saville set to emerge with controlling interest in ERG | |
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Author: March 31 2003--SMH. |
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Date Posted: Monday, March 31, 08:20:00am In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on Thursday, March 06, 08:38:56am Saville set to emerge with controlling interest in ERG By Neale Prior ----------------------------------------------------------- March 31 2003 ----------------------------------------------------------- ERG chief executive Peter Fogarty has heaped praise on the Sydney businessman set to emerge with a controlling stake in the debt-ladened smartcard operator. ----------------------------------------------------------- Mr Fogarty said investment manager Duncan Saville had taken a sensible approach in negotiations over a restructure in $250 million of convertible note debt and recognised the importance of maintaining the confidence of government customers. ----------------------------------------------------------- "If you start playing hard, you make governments nervous," Mr Fogarty said. "He understands governments." ----------------------------------------------------------- He made the comments after convertible noteholders, led by Mr Saville's interests holding about 40 per cent of the debt instruments, overwhelmingly supported a restructure that will see them issued with more than 1.7 billion shares in ERG. ----------------------------------------------------------- The deal, which remains subject to shareholder approval at a meeting on April 30, will result in the noteholders owning more than 60 per cent of ERG shares and Mr Saville's interests owning about 30 per cent. ----------------------------------------------------------- But he could lift his stake to more than 41 per cent through various other instruments related to providing $25 million financing to ERG as well as helping underwrite a mooted post-restructure rights issue. ----------------------------------------------------------- Mr Saville heads a $500 million-plus business empire that includes the Special Utilities Investment Trust (SUIT), which is listed on the New Zealand and London stock exchanges and has interests in power and water supply assets. ----------------------------------------------------------- SUIT, which is managed by Mr Saville's Sydney-based Ingot Capital Management, is linked to UK financial services group Foreign & Colonial. ----------------------------------------------------------- The London-born Australian citizen has asked for a board seat at ERG for himself, or a nominee, and for ERG to have a maximum of five board members, indicating at least two of ERG's current six-man board will have to go in a shake-up. ----------------------------------------------------------- Mr Saville is understood to have played a key role in the ERG restructure, which became necessary after the company suffered more than $350 million in losses in 18 months. ----------------------------------------------------------- Mr Fogarty said ERG rival Cubic Transportation had tried to deter government clients from dealing and signing contracts with ERG because of its financial difficulty, warning politicians they could face a public backlash by signing contracts with ERG if it subsequently collapsed. The company had withstood scrutiny by government agencies of its technology and its finances, he said. ----------------------------------------------------------- The support of SUIT and Mr Saville had been important. ----------------------------------------------------------- "He is anything but a raider, he has been working closely with the company and has been giving support to what management can do," the ERG chief said. "We want directors who are proactive and take a hard view." ----------------------------------------------------------- Mr Fogarty refused to speculate on his own future, saying he hoped to stay as long as he was able to add value to the group. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| ERG plays last minute smart card--Geoff Elliott | MARCH 27, 2003 | Monday, March 31, 08:39:16am |