Struggling ticketing company ERG Ltd announced today that its shares will resume trading on the Australian Securities Exchange next Monday after it settled a long-running dispute in Europe and the directors declared the company remained solvent.
Struggling ticketing company ERG Ltd announced today that its shares will resume trading on the Australian Securities Exchange next Monday after it settled a long-running dispute in Europe and the directors declared the company remained solvent.
Struggling ticketing company ERG Ltd announced today that its shares will resume trading on the Australian Securities Exchange next Monday after it settled a long-running dispute in Europe and the directors declared the company remained solvent.
ERG said it has concluded an agreement to settle an outstanding €7.6 million liability to Belgian company ATOS Worldline S.A relating to ERG's acquisition of Proton World International in 2001.
Under the settlement ERG will pay ATOS Worldline S.A €1 million in June 2008 in full and final settlement of all amounts outstanding in relation to the liability. The settlement will result in ERG booking a gain on the settlement of approximately €6.6 million (A$10.8 million) in its accounts for the year ending 30 June 2008.
ERG also announced that since 31 December 2007, the Group has otherwise traded on a break even basis at the Net Profit after Tax level and expects this position to broadly continue until the 30 June 2008 balance date.
From 1 May 2008 until 31 July 2008 - at which approximate time the Group expects to hold an Extraordinary General Meeting of Shareholders to vote on a proposed restructure announced on 18 April 2008 - the Group expects to generate approximately $6 million of net cash flow from operating activities as project milestone payments are received.
Since 31 December 2007 the Group's cash and cash equivalents has reduced from a balance of $17.8 million to a balance of approximately $10 million as at 30 April 2008. In addition the Company has cash deposits backing performance bonds of approximately $18 million and undrawn credit facilities of approximately $3 million at 30 April 2008.
The reduction in cash balances is mainly attributable to the settlement of non-cancellable commitments in relation to the Tcard contract (in NSW) and expenditure incurred as a consequence of the termination of the Tcard contract. The remainder of the cash has funded work in progress associated with the Group's major projects.
The directors stated today that "there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable".