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| Sunday, May 17, 10:31:37am | [ Login ] [ Contact Forum Admin ] [ Main index ] [ Post a new message ] [ Search | Check update time | Archives: 1, 2, [3], 4, 5, 6, 7, 8, 9, 10 ] |
| Subject: ERG chief executive Peter Fogarty has used a $58 million smart-card contract win as a platform to urge shareholders to support a crucial restructuring deal, which goes to the vote at the end of this month. | |
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Author: By Fran Spencer West Australian 2nd April 2003 |
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Date Posted: Thursday, April 17, 10:58:56pm In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on Thursday, March 06, 08:38:56am http://www.thewest.com.au/20030402/business/tw-business-home-sto93519.html $58m deal bait for ERG revamp nod By Fran Spencer ERG chief executive Peter Fogarty has used a $58 million smart-card contract win as a platform to urge shareholders to support a crucial restructuring deal, which goes to the vote at the end of this month. The debt-laden company said yesterday it had beaten competitors Schlumberger-Sema and Cubic Transportation to pick up the contract for the rollout of a smart card-based public transport ticketing system in the Swedish capital of Stockholm. ERG said the contract would generate more than $49 million in revenue and $9 million in maintenance over the term of the project, which is expected to be completed by the fourth quarter of 2005. The project calls for the issue of one million smart cards in the next 2½ years and will cover 150 rail and metro stations and more than 18,000 buses. The win comes just days after ERG's convertible noteholders, led by interests associated with Sydney-based international businessman Duncan Saville, overwhelmingly supported a restructure that will see them exchange their debt paper for more than 1.7 billion shares in the company. The restructure became necessary after the company suffered more than $350 million in losses in 18 months, with questions being raised about its financial survival. However, the deal is still subject to shareholder approval. In a preface to yesterday's market announcement, Mr Fogarty used the contract win to panhandle for shareholder votes at the upcoming meeting. "It is now important that shareholders support the conversion of the notes to equity on April 30," he said. "In doing so, shareholders will support the strengthening of the company's balance sheet and position the group to continue its leadership in winning major transit smart-card projects around the globe." Shareholder approval of the deal will hand ERG's noteholders more than 60 per cent of the Perth-based company's shares - with about 27 per cent immediately owned by Mr Saville's interests. But the London-born investment manager could lift his stake to more than 41 per cent through various other instruments related to the provision of $25 million in financing to ERG, as well as assistance in underwriting a mooted post-restructure rights issue. Mr Saville heads a $500 million-plus business empire that includes the Special Utilities Investment Trust, which is listed on the New Zealand and London stock exchanges and has interests including power and water supply assets. ERG shares yesterday rose to 11.5¢ on news of the contract win but retreated to close 0.5¢ higher at 11¢. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| He said the deal would improve ERG's operating results by eliminating about $15 million in annual goodwill amortisation charges, and removing the need to fund Proton research and development. | ERG plays last minute smart cardMARCH 27, 2003 Australian I.T. | Thursday, April 17, 11:04:54pm |