ERG 3.85% 2.7¢ eneco refresh ltd

ERG - Come One Come All - Proton another Great Acq

  1. 99 Posts.
    The ERG Journey is one fall of hopes and aspirations. There have been highs and by all accounts many lows.

    Now for the serious analysis.

    The Proton acquisition proposal as indicated to lucky shareholders, under the agreement the nature of the consideration provided to existing Proton shareholders included a contingent amount payable of $28 million based on an ERG share price of $0.65.

    Under the agreement ERG is required to make an additional payment to Proton shareholders if certain share price hurdles are not achieved this is due for payment in three years from the date of acquisition

    Based on a 10% decrease in the share price it would be $31 million (Based on a benchmark share price of $0.65). This equates to a share price of $0.585. Based a share price of $0.35 the contingent liability is $52 million.

    I am not sure what the market thinks of this however from all accounts this is a big number. To hold this in context with the current market sentiment and the markets view on the technology sector there is significant risk that ERG will achieve the relevant share price hurdles as required under the acquisition agreement. Just another Cash Flow Risk for the Company

    The question is how will ERG fulfill its commitments under the agreement.

    This is not to mention all the other risks that shadow the company. Convertible Note exposure and redemption requirements, breaches of banking covenants etc etc

    Risk upon Risk. layer upon layer. This stock is a time bomb. Ticking one second at a time.

    All the future opportunities are overshadowed by concerns relating to the underlying business. Oh not to mention that the business makes a LOSS.

    Shareholder Value creation would suggest that profits is the fundemental measure of shareholder value creation. If you are waiting for a profit to be generated by ERG you may have a long wait.

    Share traders have fun investors look else where.

    Is that an iceburg on the horizon.

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Mkt cap ! $7.353M
Open High Low Value Volume
2.7¢ 2.7¢ 2.7¢ $11 400

Buyers (Bids)

No. Vol. Price($)
1 150000 2.8¢

Sellers (Offers)

Price($) Vol. No.
4.5¢ 6000 1
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Last trade - 12.31pm 20/05/2022 (20 minute delay) ?
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