ERG: Announces sale of ECard Shareholding
Thu 14 Nov 2002
Published: Thu 14 Nov 2002 14:03:51
Document No: 197814
Document part: A
Market Flag: N
Classification: Asset Disposal
TELSTRA CORPORATION LIMITED. 2002-11-14 ASX-SIGNAL-G HOMEX - Melbourne +++++++++++++++++++++++++ The ERG Group today announced the sale of its 39% shareholding in ECard Pty Ltd (ECard). The shares will be bought back by ECard under a selective buy-back agreement for $5 million payable immediately. The buy-back will leave existing shareholders, Telstra and ANZ holding 100% of ECard. ERG considers the likely timeframes for returns from its ECard shareholding to be longer than that expected by its own shareholders. Accordingly, the investment has been realised with the funds to be redirected into the core business. The investment in ECard had previously been written down to zero in ERG's balance sheet, giving rise to a profit on this transaction. Under the agreement, ERG and ECard will maintain a strong relationship in supplying each other with, and working together on, multi-application smart card systems that have strong commercial drivers and rewards for both parties. ECard has retained its licence rights to the Proton technology owned by ERG. Mr Rob Noble, ERG's Managing Director Asia Pacific, said, "While we have sold our shareholding in ECard, we will continue to work closely with them on commercial opportunities. From a strategic and operational standpoint, we expect to maintain and enhance our relationship with ECard and its shareholders Telstra and ANZ Bank. "In addition, the transaction is clear evidence that despite our accounting treatment of this type of investment, it represents tangible value for the ERG Group." Formed in June 2000, ECard provides smart card multi-application and management services in addition to infrastructure and support of multi-application card issuers. ECard is currently providing services to customers such as ANZ Bank, TAFE NSW, La Trobe University and Smart Visit Solutions.