Other facts on eVentures float

by CRAIG HEATLEY, chairman eVentures

We feel compelled to respond to Brian Gaynor's investment column about eVentures NZ Ltd (April 29).

The Herald plays a valuable role in informing the general public and we welcome its investigation of our company and our initial public offering. However, we are concerned that the column, chiefly through the omission of relevant information, presents an inaccurate picture of eVentures NZ Ltd.

* The article states as fact that the share float is "badly timed and overpriced." The weight given to this statement in the sub heading and the column itself could be considered to be misleading and mischievous. The Business Herald was aware before publication that the eVentures IPO (share offer) had closed early and significantly oversubscribed due to a strong demand for shares from a wide range of institutional and retail investors. A more balanced column would have given the early closure of the IPO more prominence.

* The column refers to options made available to the Directors of eVentures. It omits the vital information that the Directors have been offered options in lieu of Directors' fees. This means that Directors will receive financial benefit from their options (exercisable at 60 cents per share) only if the company performs successfully in the future.

* eVentures has never claimed that it is certain to become New Zealand's number one internet company. This is one of the company's aims and we will strive to achieve this. If we do become New Zealand's number one internet company we are sure that the company's value will far exceed 60 cents per share. The statement that Dr Deane will ôeffectively representö Telecom is incorrect. Dr Deane was invited to join the board because of his business acumen derived from his wide-ranging experience and expertise. This invitation predated Telecom's investments.

* Representatives of the eVentures Partnership (SOFTBANK and epartners) have made it very clear on a number of occasions that they have no intention of divesting their interest in eVentures NZ. Mark Booth and Bruce McWilliam of epartners, and Jesse Parker of Softbank said this at a range of presentations while in New Zealand the previous week. It is a concern that Mr Gaynor has excluded this information whilst raising a question about any restriction of the sale of shares by eVentures Partnership.

* The article makes detailed reference to the current volatility in share price of E-Loan, Message Media and buy.com. It does not identify that these investments represent less than 10 per cent of the capital base of eVentures New Zealand. Also, the article does not point out that an investment made in Softbank in 1995 has grown in value 23 times in five years.

* The article is correct in stating that we believe the Internet will provide businesses with "enormous opportunities." This is the essence of eVentures' business and no one should invest in internet companies if they do not believe this to be the case.

Our objective in holding an initial public offering has been to give New Zealanders an opportunity to participate in the performance of what we believe will be a very dynamic New Zealand internet company. At all times we have been direct and upfront about risks and opportunities facing eVentures. We look forward to playing a significant role in New Zealand's e-commerce industry through the development of internet-based businesses.

Thank you for the opportunity to address our concerns regarding Brian Gaynor's column.

Craig Heatley
Chairman

The Herald replies: Brian Gaynor did mention that the eVentures float was expected to close three days early and oversubscribed. A separate report the same day also covered that point in more detail.

Mr Parker was absent from the Auckland presentation attended by Mr Gaynor.

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