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| Sunday, May 17, 03:12:23pm | [ 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 shareholders endorse restructure West Australian April 30th | |
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Author: (Caltex--lol) |
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Date Posted: Wednesday, April 30, 01:07:56pm 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/20030430/business/tw-business-home-sto96441.html ------------------------------------------------------------ ERG shareholders endorse restructure ------------------------------------------------------------ERG Ltd chief executive Peter Fogarty said a boardroom shake-up would not be bloodbath after the group's shareholders today voted in favour a major balance sheet restructure. ------------------------------------------------------------ The smartcard company's frustrated shareholders endorsed the company's $250 million debt to equity conversion at a meeting in Perth, despite calls for the board to be sacked because of ERG's woeful performance. ------------------------------------------------------------ It follows the approval by ERG's noteholders last month. ------------------------------------------------------------ The conversion will eliminate $250 million in liabilities from ERG's balance sheet and extinguish $18.75 million in annual interest repayments to noteholders. ------------------------------------------------------------ It will also see interests associated with Sir Ron Brierley's former righthand man Duncan Saville emerge with 26.7 per cent of the company and possibly as much as 41 per cent while Mr Saville will be offered a boardroom seat. ------------------------------------------------------------ Shareholders will have their 100 per cent interest diluted to around 35 per cent, a move which raised the ire of many at today's meeting. ------------------------------------------------------------ "You've given us nowhere to run today," said one irate shareholder, while another said the convertible noteholders effectively had the directors "by the balls." ------------------------------------------------------------ Chief executive Peter Fogarty said after the meeting that while shareholders were obviously unhappy their interest was diluted, it was the best possible outcome for ERG. ------------------------------------------------------------ He said without the balance sheet restructure, it would have been difficult for ERG to win new contracts going forward. ------------------------------------------------------------ "We have won a lot of very good contracts recently but we would have been limited in terms of how many more we could have pursued if the resolutions hadn't been passed." ------------------------------------------------------------ ERG will now consider whether or not to proceed with a rights issue of up to $50 million and will undertake review of both its board and management. ------------------------------------------------------------ Mr Saville is expected to join recently appointed director Transfield Services deputy chairman Tony Shepherd on the board which will be reduced from six to five. ------------------------------------------------------------ Mr Fogarty indicated its future make-up could be unveiled within 10-14 days. ------------------------------------------------------------ "It is not going to be bloodbath, it is all being done very sensibly everyone is working together to achieve what is best for the company," he said, adding ERG was also seeking to appoint a director with extensive IT experience. ------------------------------------------------------------ "One type of director we would still like to see come on the board is someone with very strong IT experience. ------------------------------------------------------------ "We haven't found the person to do that yet but we will keep looking. ------------------------------------------------------------ "The board will evolve over the next six months, some changes will be made sooner, some will be made longer term." ------------------------------------------------------------ Mr Fogarty said he personally maintained support for the board and shareholders, including Mr Saville. ------------------------------------------------------------ He also said it was unlikely interests associated with Mr Saville would lift their stake in ERG beyond the current level. ------------------------------------------------------------ "The 41 per cent is extremely unlikely, that is if every single thing that could happen happens, that includes doing a rights issue and including him underwriting it," Mr Forgarty said. ------------------------------------------------------------ "I think they will stick around the 25 per cent level, they are investors they don't want to manage and run the company. ------------------------------------------------------------ "If management performs and the board performs and the value of the company goes up he will as happy as can be." ------------------------------------------------------------ Looking further ahead, Mr Fogarty said ERG expected to learn whether or not it had won new ticketing contracts in Perth and Yorkshire in the United Kingdom by July. ------------------------------------------------------------ -AAP [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| ERG/WA/30/4/03Perth&Yorkshire learn/won- by July.ERG shareholders endorse restructure | by July | Wednesday, April 30, 01:28:08pm |