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Message subject : EISA Company Announcements
This message was posted by kit on June 09, 2000 :
09/06/2000 12:42 : Chairman^s address to the Annual General Meeting
The company listed on the Australian Stock Exchange on 31st August last
year. Since listing, eisa continued to expand its customer base and its
network infrastructure. The Company also commenced discussions with UUNET
in relation to the possible acquisition of OzEmail Internet.
On 24th December last year, UUNET announced that it had entered into
exclusive negotiations with Telstra for OzEmail. eisa continued work on the
project and as soon as it was able, a revised offer was put to UUNET, which
was accepted on 10th February. This involved a $20 million deposit.
Since that time, the Company has worked extremely hard on a detailed plan to
integrate the eisa business with OzEmail Internet and build the largest
Internet based communications group in Australia on three essential
* Content, and
During that process, the Company's management was strengthened with a number
of senior appointments to enhance the proposed combined business and also to
expand the Company's activity more widely in the Asia Pacific region.
Relationships were also formed with a number of blue-chip organisations
including ANZ, Fairfax, Hastings Funds Management and the Walt Disney Group
to jointly pursue the OzEmail initiative.
On 1st June, just 8 days ago, UUNET informed eisa that it was terminating
the Sale of Business Agreement with eisa.
This proposed transaction was highly complex and involved
* a number of strategic partners, including the vendor
UUNET, each with their own different commercial objectives,
* a capital raising program dependent on the capital
* a set timetable.
To our great disappointment, these elements were not combined in the time
We now believe the future of eisa lies with the Company merging with
another. As the multi-media market continues to rationalise, only the
largest companies will be able to attract the content and e-commerce needed
to satisfy customers. In eisa's case, we are now talking to interested
parties and expect to make an announcement on eisa's future soon. This will
see the Company continuing to service our customers into the foreseeable
future. The business as it sits today continues to grow and presently has
85,000 active users, it is the largest independently owned IP network in
Australia reaching 92% of the Australian population and a present capacity
to handle over 200,000 users.
This, added to the proposed OzEmail deal, would have produced something
really significant. The combined Company would have been one of the largest
internet companies in the country with leading access, content and
e-commerce and would have delivered on our promise to create an entity of
However, this did not happen and we are devising an alternative strategy for
the existing business. We are also taking steps in an effort to recover
the $20 million deposit. I cannot go into more detail as it is now a legal
matter and I cannot make any further comment.
I would also like to put on record my appreciation of the staff, management,
customers and suppliers, including our advisors who are here today - Hartley
Poynton, KPMG and Allen Allen & Hemsley - all of whom have stuck by the
Company in the face of great adversity. By these people staying at their
post, it has been to the benefit of all stakeholders including shareholders.
We have been able to maintain the core of our service business which is in
turn our true value.
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