Rivkin mounts raid on Securenet's $70m cash
By Colin Kruger
January 23 2003
Securenet is finding that having too much cash can be as much of a problem
for a struggling tech stock as having too little.
A group of the e-security company's shareholders, led by Rene Rivkin,
formally launched a move on Securenet's $70 million cash reserves yesterday.
The shareholders have requested a general meeting to vote on handing $68
million of the company's cash back to shareholders at 90c a share - which
represents the majority of the company's market value at yesterday's
closing price of $1.03.
"This is not a Farooq Khan type deal," Mr Rivkin said, with reference to
the Perth businessman who is well known for raiding struggling tech
companies to gain control of their cash reserves. He said the company was
informed of the shareholders' intentions last week.
Securenet's shares traded as low as 70c in November, representing a
substantial discount to its cash backing. A business valued at a negative
figure by the market should not have $86 million in the bank, Mr Rivkin said.
The proposal is intended to leave the company with $18 million for
operations, according to Mr Rivkin. But Securenet reported cash reserves of
only about $70 million at the end of December last year, which means it
will be left with substantially less.
The company is arguing that the money will be needed to fund its strong
organic growth this year, technology licensing costs, and further
acquisitions in a market where tech valuations have hit rock bottom.
Securenet released a market update last week - one month ahead of its half
year results - confirming it was on track to double revenues and break even
for the year.
"These financial statements will demonstrate significant earnings
improvement in the first half of 2003," said Securenet chairman David
Greatorex.
Securenet has struggled in recent years, the shares dropping from a peak of
more than $15 in March 2000.
The market would come back when it understood the company was operating in
"a very hot sector" of the market, said Securenet managing director
Geoffrey Ross.
Last year Securenet reported a loss of more than $50 million, including $43
million in extraordinary items.
http://www.smh.com.au/articles/2003/01/22/1042911436278.html
That 'hot sector' Geoff's on about involves selling ID cards to
totalitarian dictatorships I believe. It has already meant mass
deportations from Mr Lee's greater Hong Kong.
