tuk tuks offer hope for orbital shareholders

http://theage.com.au/articles/2004/05/03/1083436539836.html

Tuk tuks offer hope for Orbital shareholders
By Kate Askew
Sydney

May 4, 2004


Well it's not quite a car, but it moves. After agreements with every car maker from Ford to Chrysler over its famous two-stroke engine, Orbital Engine Corp is moving into that other great vehicular market, rickshaws.

Automated rickshaws, of course.

"One of the issues that we faced is that people think that the only transport on the planet are cars," Orbital Engine Corp chief executive Peter Cook mused yesterday.

But for Orbital - a perennial bridesmaid that has frustrated shareholders for a long time - the humble tuk tuk could well prove a handy addition for the company, which ekes a living from licensing fees.

Not surprisingly, these fees come from the more conventional markets for two-stroke engines for boats and motorcycles. Orbital's fees are largely sourced from outboard motor makers Mercury and Tohatsu, jet-ski maker Bombardier, and scooter makers Piaggio, Peugeot and Aprilia.

Orbital shares rose 10 per cent to 15.5¢ on the news that it had signed a licensing agreement with Indian auto-rickshaw maker Bajaj Auto.

The share price is hardly the $24 struck in the late 1980s on the promise of technological breakthroughs from Ralph Sarich, who convinced BHP to back his engine.

BHP sold out in 1999, raising just $28 million for its remaining 10 per cent stake.

These days, that is more than a third of Orbital's market worth of about $63 million.

Fees from Bajaj were "significant", said Mr Cook.

Meanwhile, Mr Sarich has long gone with about $200 million from slowly tipping out his Orbital shares. He has multiplied this in the property market.

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Cheers,

Fig Jam

I don't hold Orbital