ERG 23.5% 2.6¢ eneco refresh ltd

re: Plenty Of Action

  1. 48 Posts.

    HOMEX - Perth

    We attach the Financial Statements in relation to the year ended 30
    June 2002.

    The audit report, which is unqualified, refers to the emphasis of
    matter. The Directors have retained the emphasis of matter in
    relation to the significant uncertainty in the business included in
    the Financial Statements for the half-year ended 31 December 2001.

    Due to the delays in tender awards and finalisation of contract
    awards in the transit industry, there is uncertainty as to timing of
    contracts and revenue generation from them. The Directors believe
    this is an issue which investors should be made fully aware of as it
    has impacted the financial position of the Group during the 2002
    financial year.

    The Directors have also elected to take up as a non-current liability
    the deferred consideration for the Proton World acquisition. This
    amount was disclosed as a contingent liability in the Preliminary
    Final Report (Appendix 4B) lodged with the Australian Stock Exchange.
    The Directors believe this treatment provides a better disclosure of
    this obligation to the market. The recognition of this liability has
    not affected the reported earnings and has been added to the goodwill
    in relation to the Proton World acquisition.


    At the time of the Preliminary Results release in early September,
    the Company advised that it had put in place and was negotiating
    further financing arrangements. We confirm that final agreement has
    been signed with Babc*ck & Brown (post declined due to profanity) on the provision of financing. ERG
    has signed a loan agreement for a $30 million stand-by facility with
    Babc*ck & Brown (ditto) where the initial funds can be drawn down once legal
    formalities, which are expected to be completed this week, have been


    As part of these arrangements, the Board of ERG will be strengthened
    by the appointment of Mr Robert Topfer as a Director. Mr Topfer is a
    Director of Babc*ck & Brown (ditto) and has extensive international
    experience as a project and infrastructure financier, qualities that
    will assist significantly in the Group's ongoing restructuring and
    strengthening of the balance sheet.

    In addition, the Group has appointed Babc*ck & Brown (ditto) as advisors to
    assist in the restructuring and strengthening of the Group's balance
    sheet and future funding requirements. Babc*ck & Brown (ditto) is an
    international Investment firm specialising in corporate finance,
    project financing and development, and structured finance and has
    successfully completed over US$190 billion of innovative financing
    for the world's largest corporate and government bodies. One of their
    particular areas of expertise is funding for large transit projects
    globally. Full details are available at www.babc* (ditto)

    The Directors also advise that finalisation of the settlement
    documents for the Melbourne scope creep claim is expected this week.
    Details of the settlement in respect of the Melbourne Automated
    Ticketing System were announced in June 2002. This will release the
    next tranche ($20 million) of payments to the Group.

    P J Fogarty
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