Lenders back new e-venture

By ROB O'NEILL

Several lending institutions are backing eVentures in its E-loan internet-based financial services business.

The E-Loan portal is likely to be eVentures' first local launch following its public offering and listing.

Chief executive Cindy Mitchener said at an analysts' forum in Auckland this week that two of the big four banks had signed up, along with several second-tier institutions. She would not say which banks.

The software to deliver E-Loan's services, developed for the United States market, is now being customised for New Zealand.

More detail was also given on eVentures' investment plan.

It aims to create a ``balanced portfolio'' of 34 per cent business-to-business investments, 25 per cent business to consumer, 25 per cent infrastructure, 8 per cent wireless and 8 per cent early stage New Zealand ventures.

The company faced some probing questions about details of its public offering, including its senior executive options scheme. This provides for the allocation of up to five million shares at 15 cents each plus the company's weighted average cost of capital. Investors are being asked to pay 60 cents a share.

It admitted this was unusual, but necessary to meet commitments made during the formation of the company.

Chairman Craig Heatley said he expected eVentures to be able to ``wash its own face'' financially within three years.

Fifty million shares, or 20 per cent of the company, is being floated. Of that, 15 million shares in total are reserved for Telecom, Todd Capital and The Warehouse. When it lists in May, eVentures plans to have 1000 shareholders on its register. Mr Heatley said if the float did not get close to full subscription it would not list.

That seems unlikely if only because of the relatively small number of shares on offer.

``We have tried to pitch this for New Zealanders, '' he said. ``We are keen to see this list well.''

Mark Booth, chief executive of News Corporation's epartners, which will own 32 per cent of eVentures after the listing, confirmed foundation investors were not locked into the company.

He said epartners, Softbank and Craig Heatley were long-term investors as he hoped were The Warehouse, Telecom and Todd Capital.

Though the founding team had little experience in running an e-business, they brought a range of business skills to the venture. ``Their primary mission is to find the right people. That's why going public is important.''

Mr Booth said the fact eVentures had yet to earn any revenue should not be a concern as it already had assets, three deals in progress, staff and the endorsement of important domestic shareholders.