| Subject: News#1/11/2001AcqProtonrts3F10shrs/renounce/trading/com@ 9/11/2001/close/4/12/2001/book@ 15/11/2001. |
Author:
Steve Poster.
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Date Posted: 22:35:28 11/16/01 Fri
ERG ERG Ltd (01/11/00)
ERG LIMITED 2001-10-31 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++
MEDIA RELEASE
ERG ENTERS HIGH SECURITY, FINANCIAL SERVICES MARKET BACKED BY AMEX,
VISA AND EUROPEAN BANKS AND ANNOUNCES RIGHTS ISSUE
The ERG Group today announced the full acquisition of Belgian based
Proton World international SA (Proton World), the leading, global,
high security, payment and identity smart card technology company.
To fund the acquisition, and to strengthen its balance sheet, ERG
also announced a fully underwritten $104 million renounceable rights
issue.
The sale agreements call for long-term (5-7 year) service level
agreements to be executed by American Express, Banksys and Interpay
Nederland. The contracts are expected to generate revenue in excess
of A$200 million.
A separate media release relating to the acquisition of Proton World
has been released with this announcement.
The key benefits of the acquisition to ERG are:
* the Proton technology complements the systems ERG provides to its
transit customers;
* financial services and banking sector expertise;
* access to the highest standards of smart card security;
* diversity of product offerings to the multi-application smart card
industry;
* research and development and operational synergies and
efficiencies; and
* a wealth of management experience drawing on skill bases in the
financial sector, transaction processing and security arenas.
The rights issue, which is fully underwritten by Salomon Smith
Barney, will entitle ERG shareholders to subscribe for 3 new shares
for every 10 shares held at an issue price of 50 cents per share.
Listed convertible noteholders are also eligible to participate in
the issue.
The rights issue is renounceable, and rights trading will commence on
9 November 2001 and close on 4 December 2001. All shareholders and
listed convertible noteholders in ERG as at 15 November 2001 will be
eligible to participate in the rights issue. American Express,
Banksys, Interpay Nederland and Visa International will not be
eligible to participate in the rights issue.
A prospectus for the rights issue will be lodged with the Australian
Securities and Investments Commission on 31 October 2001.
ERG's chief executive, Mr Peter Fogarty, said the rights issue and
full acquisition of Proton World would significantly enhance ERG's
balance sheet.
"The acquisition positions ERG as a 'one stop shop' for all smart
card systems and application requirements for the combined groups'
collective customers. The transaction significantly expands our
customer base throughout the banking and financial services sectors
and gives us access to the fast growing security and identity
markets.
"We welcome more than 500 banking customers that have deployed the
Proton technology to add to our worldwide transit client base."
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