Bad news all round as ETT bows out

By PETER GRIFFIN

It's a sad state of affairs when an impoverished company asking for shareholder approval to delist from the Stock Exchange can't even lighten the mood with some tea and bikkies.

Electronic Transactions Technology was offering no frills, no PR puffery and no refreshments at its last New Zealand annual meeting.

Its Australian managers hurried through the formalities of rubber-stamping a decision to delist from the Stock Exchange, "morph" all aspects of the business to Sydney and seek approval to issue tens of millions more shares in return for cash.

All the resolutions had already been overwhelmingly passed in proxy by Australian-listed ETT's major investors, who hold more than 85 per cent of the shares.

"These things aren't palatable for you," company secretary Peter Nightingale told the handful of shareholders who piled into a nondescript office at ETT's Grafton headquarters. "You guys get dragged along, sadly there's an inconvenience,"

Chairman Robert Barraket told shareholders he had called in an old favour from business associates to raise $400,000 in exchange for 25 million shares to tide the company over.

The money was being used to pay creditors and "resolve a difficult past" involving litigation with old business partners.

"No investor could really take a punt on the company when there's these things from the past," said Barraket.

The shareholders, seated on office swivel chairs, seemed resigned to the fate of their languishing investments in ETT. One was even going to spend "a few hundred bucks" more for one last punt on the company.

Nightingale said ETT was a "basket case" when he joined it in April. It would make a loss next year and there would be no "magic share price explosion coming any time soon".

ETT shares closed for the week at 3.5c.

Hope for the company lay in Patloc, ETT's software product which runs on public terminals that allow users to check email and surf the web with pre-paid access cards. Patloc's operations nearly broke even last month.

The terminals were increasingly being installed in backpacker lodges and hotels across Australia and New Zealand.

A deal to install the terminals in McDonald's restaurants was working well across the Tasman but had stalled here. Terminals were in just one restaurant nearly 18 months after the McDonald's relationship was first flagged.

"Have you ever had to deal with McDonald's?" Barraket offered in explanation. "There's politics inside the company."

ETT Australasia's software security business was another story, despite it undertaking a software trial with Qantas. Nightingale compared the division's chances of success to striking oil - it may never happen but if it did, ETT would be rich.

"There's high potential return, high risk, but low probability [of success]."

The delisting is yet another twist in the fortunes of ETT, which was previously known as E-phone and gained its New Zealand listing through a reverse takeover of property shell company Habitat Group.

E-phone had high hopes of installing hundreds of terminals across the country and its share price sailed as high as 80c.

But ETT lost $7 million in the year to March 31. By the end of September it had lost another $1.4 million.

ETT will retain a New Zealand share register and shareholders will be able to trade their shares on the ASX through local brokers.

ETT said the cost of maintaining a listing in New Zealand was too expensive.

"Where do we go to get the airfare to attend the AGM in Australia?" quipped one shareholder.

"If we ever declare a dividend I'll shout you a ticket," Barraket replied.

ETT is in negotiations to gain more funding, though Barraket declined to say who it was talking to or how much it was looking to raise. In the meantime there was no "fruit cake and coffee" budget for hungry investors.

"It you want to wait 10 minutes you can give me a ride to Parnell and I'll buy you a coffee," Barraket offered at the meeting's end.

No one took up the offer.