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| Subject: December the 3rd released report from Pattersons | |
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Author: saxien |
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Date Posted: 05:59:15 01/18/03 Sat Posted by: saxien Jan 18 2003 10:51:26:513PM Reply to post # by Go to Post # Previous Respond Message List This from Pattersons, ERG Limited ERG has announced at the recent AGM a proposed restructure of its balance sheet which if accepted will leave it better placed financially to secure major ticketing contracts. The restructure of the $250 million in listed notes will result in the issue of almost 1.7 billion shares, which will significantly dilute the interests of existing shareholders. This dilutionary impact is offset to some extent by the removal of the interest burden on the notes of $18 million per annum. A rights issue of redeemable converting preference shares is also proposed which will raise approximately $50 million. Bonding requirements for contracts has increased substantially and is cited as the major reason for bringing forward the note conversion. The logic of the conversion at this time (and low share price) only makes sense if contract awards are near certain. Sydney, Seattle and Washington appear to be due for award in the next few weeks. Major noteholders are committed to the restructure and are supporting the rights issue by underwriting at least $25 million of the issue. The major risk to the restructure is if it is rejected by ordinary shareholders. Those seeking exposure to ERG should buy or switch to the notes but be aware that post the restructure the share price will be under pressure from the shares issued to the noteholders. (Voluntary Disclosure:No Position Short Term rating: Long Term Rating:) OZeStock Advertisment:"Get yourself an institutional advantage!" Previous Respond Message List [ Next Thread | Previous Thread | Next Message | Previous Message ] |