Troubled E-Phone 'won't quit NZ'

By MICHAEL FOREMAN

Troubled internet kiosk operator E-Phone has denied it is quitting New Zealand, despite announcing to the Stock Exchange that it will transfer its principal business activities to Australia.

The announcement was made last week as E-Phone posted a loss of $8.49 million, based on sales revenue of $1.658 million.

Chief executive Bob Barraket said E-Phone's headquarters would move to Sydney following its takeover of the Eftpos company ETT Australasia (formerly Ecom), which was based there.

E-Phone would rename itself ETT, but continue to base its public access terminal operations in New Zealand.

The acquisition, which has been financed by an issue of E-phone shares, is the latest twist in the occasionally bizarre saga of E-Phone, which gained its New Zealand listing through a reverse takeover of property shell company Habitat Group.

While Habitat had traded around 5 cents per share in late 1999, by January last year - after E-Phone had announced ambitious plans to install 2000 public access terminals in New Zealand - the company's share price briefly topped 80 cents.

At the beginning of February last year, E-Phone raised $1.52 million with a share placement of 2.15 million shares at 71 cents per share. At that time, Mr Barraket said cash reserves of $3.25 million meant the company would not seek further finance in the near future.

However, the company has made at least five subsequent placements at the same time as its kiosk plans have been slow to materialise and its share price has dropped.

Along the way, it acquired an internet phonecard business from Voyager in January last year before selling it to Net-Tel 10 months later.

Yesterday, E-Phone shares were trading at 7 cents, but its market capitalisation stood at $13.8 million, with a total of 197,808,000 issued shares.

Mr Barraket said there were about 100 terminals installed in New Zealand.

"We are only starting to ramp up now. A number are about to happen here."

Asked how it was possible to sell shares in E-phone when the share price had dropped so dramatically, Mr Barraket said: "There are obviously lots of people who still have faith in us who are taking the placements."

E-Phone