ERG Group bails out of ECard chip consortium
14 November 2002 | 2638 views | 0
The ERG Group has sold its 39% shareholding in Australian smart card software consortium ECard to existing shareholders Telstra and ANZ.
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 says it bailed out of the consortium because of the long lead times for return on investment. Funds from the sale will be redirected into ERG's core business.
Under the sale agreement, ERG and ECard will continue to work together on the development of multi-application smart card systems. ECard has retained its licence rights to the Proton technology owned by ERG.
Rob Noble, ERG’s managing director Asia Pacific, says: "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."
Formed in June 2000, ECard currently provides services to customers such as ANZ Bank, TAFE NSW, La Trobe University and Smart Visit Solutions.