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| Subject: Noteholders have tickets to ride | |
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Author: Newspapers reporting result--March 7 2003 SMH |
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Date Posted: Thursday, March 06, 08:38:56am Noteholders have tickets to ride By Elizabeth Knight March 7 2003 ----------------------------------------------------------- Ahead of the NSW election, it would be comforting to think that the incumbent Government could be relied on to demonstrate sufficient financial acumen to award one of its largest and most important contracts to a company sufficiently resourced to stay in business long enough to fulfil it. ----------------------------------------------------------- Sadly not. ----------------------------------------------------------- The State Transit ticketing contract that will deliver a card capable of use on all forms of public transport, and that the Government has been endlessly crowing about, has been signed with Perth technology company ERG, which yesterday reported a post-tax loss of $124.9 million for the half to December 2002. ----------------------------------------------------------- But worse still, it had to issue a statement that its continued financial viability and its ability to meet its debt commitments depended on the ability to secure additional equity finance and banking facilities. ----------------------------------------------------------- It says also significant uncertainty remains as to whether it will continue as a going concern. ----------------------------------------------------------- This is a $320 million contract. ----------------------------------------------------------- When the Herald contacted the office of the Transport Minister, Carl Scully, his spokesman was unaware of ERG's statement and profit report. ----------------------------------------------------------- He scuttled off and some hours later released a statement saying it was expected ERG would fulfil its obligations and that the appropriate financial securities, guarantees and progress payment retention arrangements were in place. ----------------------------------------------------------- When quizzed further on the nature of these financial securities and guarantees, he said they could not be disclosed. ----------------------------------------------------------- The statement also said financial consultants to the state had reviewed ERG's financial position before the contract signing. He would not say who the consultants were. ----------------------------------------------------------- It would be interesting to know how this due diligence was done, given ERG reported a loss of almost $200 million in the previous corresponding period. ----------------------------------------------------------- It is strange that guarantees would be accepted from a company that needs to ask its convertible noteholders to take shares in the company because it can't continue to pay the interest attached to the notes. ---------------------------------------------------------- These notes have a face value of $13.50 but since their issue the company has undertaken a 3-for-1 share split which ascribes them a real face value of about $4.50. This compares with yesterday's closing share price of 12c. ----------------------------------------------------------- These noteholders, who have in effect lent $250 million to ERG, would be well aware that the notes cannot be redeemed at face value and will therefore opt to convert them to equity. ----------------------------------------------------------- Given the current trading price of the shares, noteholders will receive a staggering 90 shares for each note. ----------------------------------------------------------- But this is not enough. ERG will also be going to the market to raise an additional $50 million in equity and is selling a recently bought business, Proton World, to raise $110 million. ----------------------------------------------------------- This exercise may get the company out of its current cash flow bind, but in a general sense it has been struggling to find cash to fund the expenses associated with contracts it won years ago. ----------------------------------------------------------- Since the early 1990s ERG has raised nearly $615 million, including money to buy Proton some 18 months ago. ------------------------------------------------------------ As far as the NSW Government contract is concerned, it is fair to say the timing was stretched due to the tactics of the rival bidder, Cubic Transportation Systems. ----------------------------------------------------------- It tried every trick in the book to prevent ERG from winning the contract. The case eventually ended up in the courts, where ERG won. ----------------------------------------------------------- The Government clearly believed ERG had the better technology - and this is not necessarily in dispute. ----------------------------------------------------------- The reality is that ERG has a financial record that arguably should not be good enough to pass due diligence for a government contract. ------------------------------------------------------------ ERG's chief executive, Peter Fogarty, is hoping but not guaranteeing a return to profitability next financial year. ----------------------------------------------------------- This will depend on a lot of timing issues and being awarded contracts. ----------------------------------------------------------- He says that despite the financial uncertainty facing the company, he is prepared to enter into new contracts - a move that suggests a level of confidence in ERG that is beyond that ascribed by the finance community. ----------------------------------------------------------- But if this capital restructuring is successful, several major elements will change - not the least of which is the fact that these noteholders will now have control of the company. ----------------------------------------------------------- Around 25 per cent of the group's expanded capital will go to the owner of the majority of the convertible notes, the UK-based Special Utilities Investment Trust. Australian Ethical Investments will also emerge with a significant shareholding. ------------------------------------------------------------ Who knows, these shareholders may foster a new level of discipline in management. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| ERG improves but still in red | March 7 2003 The Melbourne Age. | Thursday, March 06, 09:12:11am |
| ERG loses $125m, seeks funds | By Colin Kruger March 7 2003 SMH | Thursday, March 06, 09:25:55am |
| Proton World Sale Is Near, ERG Says "at an advanced stage of negotiation" | Washington, D.C. area.--clearinghouse and customer service center--Northrup Grumman 6/3/03 | Saturday, March 08, 08:28:29am |
| brought to account in arriving at the PW provision in the first half. | Euro 60 million (A$110 million)excludes the Euro 22.5 million earn-out payment | Monday, March 10, 03:49:11am |
| Guerilla warfare tactics blamed for ERG's woes | 07/03/2003"(Cubic) were constantly writing to all of the operators. They employed investigative journalists and hired PR firms. | Tuesday, March 11, 12:59:29am |
| ERG breaks 10c as foreigners depart March 11 2003Banksys | .vote on a capital restructure could give the smartcard group's convertible note holders effective control. | Wednesday, March 12, 12:08:00am |
| analysis. | No name | Thursday, March 13, 04:02:46am |
| In the West Australian today Raider adds ERG to fold By Neale Prior West Australian 28/3/03 | about 7.6 million of the 18.5 million notes on issue. | Friday, March 28, 12:58:29am |
| Newspaper analysis--ERG beginning to become sexy stock (NT) | harbourside mansions jetsetting etc. | Friday, March 28, 05:04:12pm |
| Subject: Sentiment ERG newspapers beginning to become sexy | Name: Wonder Woman | Friday, March 28, 05:11:51pm |
| 250m conversion begins ERG shake-up | Sydney Morning Herald 29/03/2003 | Saturday, March 29, 11:50:50am |
| Saville set to emerge with controlling interest in ERG | March 31 2003--SMH. | Monday, March 31, 08:20:00am |
| ERG plays last minute smart card--Geoff Elliott | MARCH 27, 2003 | Monday, March 31, 08:39:16am |
| Those that are familiar with Australian idiom--P Fog is currently sucking up to Dunc Saville. (NT) | Professor dag analysis | Monday, March 31, 09:15:30am |
| ERG plays its cards right in Sweden | April 2 2003 | Tuesday, April 01, 11:50:44pm |
| How Swede it is if you don't own it | Mark Westfield--The Australian--Wed 2 Apr 2003 | Tuesday, April 01, 11:53:28pm |
| EFIC to provide A$25.6 M in Proj Performance Bonds to ERG | 4/3/03 | Wednesday, April 02, 11:00:01pm |
| ERG's deal with Rome to proceed | SMH April 17 2003 | Wednesday, April 16, 10:11:25am |
| ERG's Rome expansion gets green light | West Australian 16/4 | Thursday, April 17, 09:56:57pm |
| ERG was the biggest traded WA stock as it lifted 0.5˘, to 10.5˘, on volume of nearly three million shares. | April 10th 2003 West Australian | Thursday, April 17, 10:01:40pm |
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| ERG finds source of guarantee funds for overseas contractsApril 4 2003 Melbourne Age | (the WA article should read 17/4--(American date)(Rome expansion gets green light)Many tenderers were now demanding such large bonds that the risk had become unacceptable. | Thursday, April 17, 10:16:25pm |
| 'Smart-card' ticket system approved for transit riders Seattle | Tuesday, April 08, 2003 - Page updated at 12:00 a.m.Seattle Times | Thursday, April 17, 10:21:30pm |
| ERG sells Proton World | Mar 26 15:31--AFR | Thursday, April 17, 10:31:36pm |
| Stock market advances Herald Sun on or around March 26th--no date | Smartcard company ERG Ltd was 0.6 cents lower at 10.5 cents as it sold its 100 per cent interest in Belgian-based Proton World to micro-chip manufacturer STMicroelectronics (ST) for $110 million. | Thursday, April 17, 10:37:20pm |
| AUSTRALIA'S ERG SELLS PROTON WORLD FOR US$65.62 MLN | Business in Asia Today -- March 26, 2003Press Release Source: Asia Pulse | Thursday, April 17, 10:51:40pm |
| 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. | By Fran Spencer West Australian 2nd April 2003 | Thursday, April 17, 10:58:56pm |
| 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 |
| Schlumberger plans IPO of smartcard arm Published: April 16 2003 22:07 | Last Updated: April 16 2003 22:07 | The unit is valued at about ?800m. The Franco-US business has become the world's leading producer of smartcards after overtaking France's Gemplus in revenues in the second half of last year. | Thursday, April 17, 11:10:24pm |
| Note Schlumberger which took over Sema Shaud Duffy stated the reason ERG had gone to 47.1% was ERG bought Sema's interest out in PCL in the last ERG report 6/3/03 it had gone down to 40%--bit of a mystery here--needs clarification (NT) | sale by Schlumberger in 2nd half should have tangibility consequences for ERG's share in PCL. | Thursday, April 17, 11:13:04pm |
 | Sydney stage 1 then stage 2 to 4 on track SMH 28/4/03 | Sunday, April 27, 04:07:50pm |
| ERG rejig passed, new board next SMH May 1st 2003Mr Fogarty said the revamped board would be announced within the next two weeks, adding that he still had the support of the board and shareholders. |  Photo: Peter Rae | Wednesday, April 30, 12:22:07pm |
| Melbourne Age May 1stWeakened ERG gets its ticket to ride againSeattle projectBy Ian Porter | Picture: TONY FEDER  | Wednesday, April 30, 12:45:01pm |
| ERG shareholders endorse restructure West Australian April 30th | (Caltex--lol) | Wednesday, April 30, 01:07:56pm |
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| ERG shareholders back recapitalisation/P Fog-sit down and discuss."My intention is not to be here forever, so some time in the next 2years, the term of my contract, I'll probably leave." | Mandy Bryan with AAP AFR May 1st/03 | Wednesday, April 30, 01:13:13pm |
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| Defence checks out smart cards Kelly MillsAPRIL 15, 2003 OzI.T.The smart card deployment is part of Defence's $34 million e-Defence projectA consortium led by Computer Sciences Corp is implementing the first phase of the e-Defence project. | Major smart card suppliers Keycorp and ERG both said they were not in discussions about this project with CSC. | Wednesday, April 30, 01:51:52pm |
| NRMA confirms ERG shareholding (alliance agreement as well May 2001) Daily TelegraphSTEPHEN DOWNIE 24apr03 | Pharlap--Arwon I think did a good job in the 1929 and 1930 Melbourne Cups Steve | Wednesday, April 30, 01:58:03pm |
| Sound Transit to decide if one ticket is good for all agencies | Thursday, April 24, 2003 (Seattle now signed 29/4/03 announced 30/4/03) | Wednesday, April 30, 02:03:18pm |
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| 'Smart card' will buy fares on bus, rail and ferry | Friday, April 25, 2003By JANE HADLEY SEATTLE POST-INTELLIGENCER REPORTER | Thursday, May 01, 05:44:41am |
| Sound Transit to decide if one ticket is good for all agencies | Thursday, April 24, 2003$6.7 million (outsource?) | Thursday, May 01, 05:50:15am |
| Agencies agree on electronic fares/The seven agencies are Sound Transit, King County Metro, Snohomish Transit, Everett Transit, Kitsap Transit, Pierce Transit and the Washington state ferries. | Wednesday, April 30, 2003 · Last updated 2:09 p.m. PTOther agencies may join the smart card system later. | Thursday, May 01, 05:53:13am |
| Auditors again find no problems with Sound Transit's books | Thursday, May 1, 2003 | Thursday, May 01, 09:12:36am |
| Local Digest Officials sign smart-card pactWednesday, April 30, 2003 - Page updated at 01:49 p.m. | while Seattle monorail officials have expressed interest. Any agency in Washington, Idaho or Oregon can join later, and cards could be used to pay for highway tolls or parking fees, Sims said. | Thursday, May 01, 09:28:02am |
| ERG--Seattle May2nd U.S. time Agencies agree on transit ‘smart cards' | Seattle--U.S. news. | Friday, May 02, 02:23:42am |
| Chairman replaced on ERG boardBy Colin KrugerMay 6 2003 | Approval is expected by May 14. In that case, the notes would be delisted on or around May 26, ERG said. | Monday, May 05, 09:01:55pm |
| Sound Transit financially healthy, says audit reportsSOUND TRANSIT is financially healthy, according to audits conducted by the Washington State Auditor and Deloitte & Touche. | No name | Tuesday, May 06, 06:52:37am |
| Another four years of MetcardMay 26 2003 ERG One Link 2007 money allocated/cost ballpark/400m |  | Monday, May 26, 02:03:26am |
| PLASTIC smart cards will replace the failed Metcard ticket system on Melbourne's trams, trains and buses under a $400 million plan. | May 25, 2003Hi-tech system to replace Metcard | Monday, May 26, 10:24:55am |
| Mr Batchelor said cost estimates would be drawn up and fine details of the system worked out before tenders were sought. | Melbourne 25/5/03 | Wednesday, May 28, 01:22:05am |
| Paterson Ord Minnett, the only broker still following the ticketing vendor - and which is advising ERG on the restructure - said the company could report a $17 million profit on revenues of $300 million to $350 million next year. | May 16 2003 | Sunday, June 01, 03:11:39am |
| Subject: officially cancelled its proposed $50 million rights issue,troubled company's recapitalisation plans.26/06/2003 | The Australian Financial Review | Monday, July 07, 11:19:39am |
| Subject: Bounce in valueBy Tom EllisonSunday, 29 June 2003 | ERG Limited. 80c. Avoid. | Monday, July 07, 11:22:07am |
| Views are mixed on what the next 12 months hold, although some hope that the US economy really might be on the mend has led some to suggest that stocks with international exposure (ERG, Brambles, CSL and, for only a short while longer, AMP) could be winners for fiscal 2004. | July 1 2003 | Monday, July 07, 11:24:01am |
| changes made to the project design at a late stage blew out the budget of OneLink's Melbourne public transport ticketing system rollout | June 24 2003 | Tuesday, July 08, 09:40:12am |
| ERG's management and new board must now demonstrate they can get pricing right, win profitable contracts and give real returns to shareholders. | ERG insiders claim the company has learned some hard lessons from its near-collapse.July 18, 2003 | Saturday, July 19, 02:50:15am |
| Margins (NT) | Analysts in the past have suspected that ERG pursued contracts without adequate margins to cover the cost of developing and tailoring technology. | Saturday, July 19, 02:51:59am |
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| Subject: If you believe for a minute that ERG operate with a 7.5% profit margin on revenueCurrent revenue is $300Million (who knows what the current revenue figure will be - hope not lower than this).. | http://www.ozestock.com.au/MessageView.asp?Symbol=ERG&PostID=245437 | Saturday, July 19, 02:54:18am |
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| 16th Response to ASX Share Price Query | In addition, the company in the ordinary course of business, has lodged a number of tenders for transport ticketing systems around the world | Saturday, July 19, 03:11:34am |
| http://www.smh.com.au/articles/2003/07/17/1058035143639.html (NT) | Telstra back on buyers' radar HRV has covered his shorts and bonkers has been banned. | Saturday, July 19, 03:38:53am |
| banned for Sot did I say something wrong? | SOT 20c to a dollarEveryone who reads the paper knows Sydney ERG the damage you sh%%theads doThey want stockhouse delusional ERG | Saturday, July 19, 04:35:26am |
| Everyone wants to do herdal analysis---just look at me?--How much I've suffered--no need to go back years--just look at the present. (NT) | enough I just want NTA and a few other things you can do what you like with the rest. | Saturday, July 19, 05:42:49am |
| I'm cheesed off I bought it at 2.56 okay? What does that mean to me?--Cheers. (NT) | 256 246 236 226 216 206 196 186 176 166 156 146 136 126 116 106 | Saturday, July 19, 05:47:43am |
| 96 86. (NT) | No name | Thursday, August 21, 01:24:38am |
| Steve 10 gives his 100% support to Walt12. (NT) | Steve. | Thursday, August 21, 01:43:02am |
| ERG will report on Friday the 12/9/03 (NT) | No name | Saturday, August 23, 08:24:08pm |
| 04/09/2003 ERG forced to restructure Italian project ---26/08/2003Costa puts dampener on ERG smartcard | Chips are back on the table as Australia catches up Smartcards are being dusted off due to new demand07/08/2003 | Wednesday, September 03, 08:57:55pm |
| Rome sell-back lifts pressure on ERGBy Colin KrugerSeptember 4, 2003 | Transport ticketing provider ERG has fixed its troublesome Rome contract | Wednesday, September 03, 08:59:47pm |
| NRMA loss grows: ERG and other investments to blameSeptember 3, 2003$22.4 million written off | The "strategic alliance" with ERG, formed two years ago by former CEO Rob Carter, has now been unwound. | Wednesday, September 03, 09:01:43pm |
| NRMA | Note 17.01b: National Roads and Motorists' Assoc. ceased trading on 30 June 2002. | Thursday, September 04, 08:22:08am |
| minus 124.9 equals 21.9 million loss.Aug 27 Mandy Bryan AFR | Analysts expect ERG to post a loss of $145million in the year to June 30, 2003. | Wednesday, September 10, 02:56:00am |
| Big-ticket changesSeptember 13, 2003 | The State Government is proposing radical changes to transport services. Joseph Kerr looks at which reforms might make it. | Friday, September 12, 06:07:31pm |
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| Friday profit wrap: Red facesSep 12 16:08 | Perth automatic ticketing operator ERG Group Ltd said it was budgeting to return to profitability in 2003/04. | Friday, September 12, 06:16:57pm |
| River of red swamps ASXBy Leonie Wood, Ian Porter, Eli Greenblat | September 13, 2003 | Friday, September 12, 06:22:52pm |
| ERG smartens up with new dealsOctober 1, 2003 | But in Rome, its malfunctioning e-ticket machines are being blamed for traffic snarls. | Tuesday, September 30, 09:45:20am |
| ERG chief steps aside to recuperate from accident | October 24, 2003 | Sunday, January 25, 09:48:26am |
| Dr Allan Sullivan Commences as CEO of ERG | January 9, 2004 announcement on 23 October 2003. | Friday, January 30, 06:31:05am |
| U.S. Government Issues Smart Card Guidelines | (2004-02-17) | Saturday, February 21, 04:20:14am |
| Approved net Short Sale positions as at end of day 16-Feb-2004 | No shorts since 16/2/04 | Saturday, February 21, 04:22:24am |
| positive announcement is expected | Posted by: Walt Feb 21 2004 6:58:09:390PM | Saturday, February 21, 05:39:10am |
| Robert Gee from Paterson ord minnett has already updated the market very proficiently about ERG | It is bound to make reported 6.1c EPS and normalised EPS 3.6c in 2004F | Saturday, February 21, 05:44:26am |
| I understand Walt--if I knew at the beginning of so many company's--not just ERG--that as a small businessperson I would have received so much harrasment on the net--violation of privacy etc (NT) | I sincerely would have gone your way too--it has been absolutely devastating to my family. | Saturday, February 21, 05:52:40am |
| I have no fear of ERG---yes I regret using BB's honestly--for in the end myself--and through me my family has suffered (NT) | I certainly regret stepping on certain shoes--I may end up on a scapheap as a result of it. | Saturday, February 21, 08:50:24pm |
| ERG a screaming buy at present prices---and that is just the truth (NT) | truth. | Saturday, February 21, 08:52:18pm |
| ====================90==============Informer----Muharram | 9 x 10 = 90---27 days Triple witch--3 x 9 = 27--recycling 22 to 28--53 days Start 2004--Sunday 22nd February | Sunday, February 22, 12:26:24am |
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| 27/02/04 By: Andrew NelsonERG Group (ERG) today announced its financial results for the six months ended 31 December 2003 with the group reporting a net loss after tax of $43.2 million, including one-off write-downs | and provisions totalling $36.2 million. | Tuesday, March 09, 07:35:37am |
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| Re: Noteholders have tickets to ride | Cards not so smart for ERG: new boss | Tuesday, March 09, 07:39:47am |
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| No more write-down shocks, says ERG chief | March 16, 2004 | Thursday, March 18, 09:30:09am |
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| holds 24.3 per cent of ERG's voting shares. | New Zealand Herald, New Zealand - Mar 26, 2004==27.03.2004 | Sunday, March 28, 05:40:58am |
| ERG looks ahead with $67m raising=five-for-four=issue of shares at 20c apiece | July 2, 2004 | Friday, July 02, 06:59:23pm |
| Utah and New Zealand contracts awarded to ERG | 13-April-06 by Edited announcement | Thursday, April 13, 08:30:05pm |
| NTA as given as at 31/12/05 (NT) | is 17c down from 26c prior period. | Thursday, April 13, 08:33:38pm |
| Online Medicare payments by year end | APRIL 25, 2006 | Monday, April 24, 06:28:37pm |
, Saturday, July 19, 03:52:18am