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ERG 0.0¢

Where There Is Smoke?????

  1. From today's The Australian.

    cheers

    Steve


    http://www.theaustralian.news.com.au/printpage/0,5942,4725933,00.html


    ERG needs $18m to save losing hand.

    18jul02

    TROUBLED ticketing and smartcard systems contractor ERG is in further strife with CARD.etc, its European technology centrepiece, having been effectively closed down and facing insolvency, according to its chairman.

    The German chairman of CARD.etc, Henning Jenson, told this columnist yesterday that the card-processing company of which ERG holds 19.9 per cent will be insolvent "within three months" unless it receives at least |10 million ($18.2 million) to enable it to complete contracts in the Rhine-Rhur region of Germany.
    But a spokesman for ERG, Shaun Duffy, said he was unaware of any problems in these countries.

    Jenson recently resigned as head of ERG Germany to join the rival fare collection group, US-based Cubic Transportation, but remains chairman of CARD.etc.

    The ERG company installed the ticketing system for Melbourne's trains and trams and has been falling out of favour with investors since it peaked at $4 a share before the technology bubble burst in April 2000.

    It hit a low last April of 22.5c and closed yesterday at 26c.

    Its CARD.etc investment was at the centre of a fall-out between the company and its auditor, PWC, last year when the auditor refused to allow $31 million in "profit" ERG claimed from the sale of technology licences to CARD.etc in exchange for shares.

    As a result of this revision, ERG announced a profit of just $6.1 million, 83 per cent down on 2000, and one-sixth of the expected result.

    The company announced write-downs of $199 million in its first half result for 2002.

    Its auditor of five years Ian Allen resigned shortly before the 2001 result was announced last August, and his replacement Michael Slater resigned in January this year.

    ERG has just settled a $45 million damages claim by the Victorian Government over faults in the $300 million train and tram ticketing system ERG installed in Melbourne in the mid-1990s.

    A newspaper survey early last year of 205 stations in the metropolitan Melbourne area found that one in four ticket machines on the city's railway system was faulty and on the worst line 75 per cent of the machines weren't working.

    Despite this, the NSW Government named a consortium headed by ERG as "preferred tenderer" for the $500 million Sydney rail, bus and ferry ticketing system, using the same technology as Melbourne.

    A final decision on the contract has been delayed because of legal action by Cubic against the NSW Government. Cubic alleges the tender process was not conducted properly. The court hearing concluded on May 9.

    The judge has yet to bring down his decision.

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