ERG adds Seattle but capped shares hardly move -- ERG trade data forum

[ Show ]

Support VoyForums

[ Shrink ]

VoyForums Announcement: Programming and providing support for this service has been a labor of love since 1997. We are one of the few services online who values our users' privacy, and have never sold your information. We have even fought hard to defend your privacy in legal cases; however, we've done it with almost no financial support -- paying out of pocket to continue providing the service. Due to the issues imposed on us by advertisers, we also stopped hosting most ads on the forums many years ago. We hope you appreciate our efforts.

Show your support by donating any amount. (Note: We are still technically a for-profit company, so your contribution is not tax-deductible.) PayPal Acct: Feedback:

Donate to VoyForums (PayPal):

[ Login ] [ Contact Forum Admin ] [ Main index ] [ Post a new message ] [ Search | Check update time | Archives: 1, [2], 3, 4, 5, 6, 7 ]

[ Next Thread | Previous Thread | Next Message | Previous Message ]

Date Posted: 14:01:35 02/26/03 Wed
Author: By Colin KrugerFebruary 27 2003
Subject: ERG adds Seattle but capped shares hardly move

ERG adds Seattle but capped shares hardly move
By Colin Kruger
February 27 2003

Smart card vendor ERG has added a $US63 million ($104 million) project in Seattle, Washington, to last week's $320 million integrated ticketing contract for Sydney's public transport system.

The company announced yesterday that it had reached agreement with six public transport agencies to set up a regional fare collection system covering Seattle and the Puget Sound area of Washington state.

The project is expected to offer a seamless smartcard fare system for the region's bus, commuter rail and ferry services which ERG will then manage for 10 years. Final approval from the agencies' boards is expected by mid-March.

ERG said that 400,000 smartcards would be issued when the first phase of the system became operational in about two years.

The region generates 130 million passenger journeys a year worth more than $US160 million, the company said.

advertisement

advertisement

The results give some support to ERG's management, which announced an unpopular capital restructure in November last year, which sent the already unpopular shares plummeting to a then all-time low of 14.5c.

Three years ago the shares traded as high as $4.30.

Shareholders were not happy with the news, which would hand control of the company to its convertible noteholders.

ERG said that it needed the restructure, and a $50 million rights issue, to strengthen its balance sheet for these big infrastructure projects.

The news yesterday didn't do much for the company's shares, which went as high as 17c before finishing unchanged at 15.5c.

The share price is effectively capped at 15c per share, which equates to the proposed conversion price of the convertible notes, said Paterson Ord Minnett analyst Robert Gee.

The stock is mostly driven by day traders at the moment, while the smart money has been buying the convertible notes, which get more attractive terms from the restructure, he noted.

Paterson Ord is working with ERG on the restructure, which includes the capital raising.

ERG said convertible noteholders would vote on the plan late next month, followed by shareholders sometime in April.

[ Next Thread | Previous Thread | Next Message | Previous Message ]