ERG LIMITED 2002-10-01 ASX-SIGNAL-GHOMEX -...

ERG LIMITED 2002-10-01 ASX-SIGNAL-G

HOMEX - Perth

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We attach the Financial Statements in relation to the year ended 30
June 2002.

The audit report, which is unqualified, refers to the emphasis of
matter. The Directors have retained the emphasis of matter in
relation to the significant uncertainty in the business included in
the Financial Statements for the half-year ended 31 December 2001.

Due to the delays in tender awards and finalisation of contract
awards in the transit industry, there is uncertainty as to timing of
contracts and revenue generation from them. The Directors believe
this is an issue which investors should be made fully aware of as it
has impacted the financial position of the Group during the 2002
financial year.

The Directors have also elected to take up as a non-current liability
the deferred consideration for the Proton World acquisition. This
amount was disclosed as a contingent liability in the Preliminary
Final Report (Appendix 4B) lodged with the Australian Stock Exchange.
The Directors believe this treatment provides a better disclosure of
this obligation to the market. The recognition of this liability has
not affected the reported earnings and has been added to the goodwill
in relation to the Proton World acquisition.

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At the time of the Preliminary Results release in early September,
the Company advised that it had put in place and was negotiating
further financing arrangements. We confirm that final agreement has
been signed with Babc*ck & Brown (post declined due to profanity) on the provision of financing. ERG
has signed a loan agreement for a $30 million stand-by facility with
Babc*ck & Brown (ditto) where the initial funds can be drawn down once legal
formalities, which are expected to be completed this week, have been
satisfied.

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As part of these arrangements, the Board of ERG will be strengthened
by the appointment of Mr Robert Topfer as a Director. Mr Topfer is a
Director of Babc*ck & Brown (ditto) and has extensive international
experience as a project and infrastructure financier, qualities that
will assist significantly in the Group's ongoing restructuring and
strengthening of the balance sheet.

In addition, the Group has appointed Babc*ck & Brown (ditto) as advisors to
assist in the restructuring and strengthening of the Group's balance
sheet and future funding requirements. Babc*ck & Brown (ditto) is an
international Investment firm specialising in corporate finance,
project financing and development, and structured finance and has
successfully completed over US$190 billion of innovative financing
for the world's largest corporate and government bodies. One of their
particular areas of expertise is funding for large transit projects
globally. Full details are available at www.babc*ckbrown.com. (ditto)

The Directors also advise that finalisation of the settlement
documents for the Melbourne scope creep claim is expected this week.
Details of the settlement in respect of the Melbourne Automated
Ticketing System were announced in June 2002. This will release the
next tranche ($20 million) of payments to the Group.


P J Fogarty
CHIEF EXECUTIVE