Aussie smart card vendor cuts free from Motorola

Australian smart card vendor ERG Ltd. has ended an alliance it formed three years ago with Motorola Inc. to cooperate on selling smart card products and services, ERG announced Monday in a statement to the Australian Stock Exchange.

“ERG will assume responsibility for all existing projects and those currently being pursued by the alliance,” ERG said in the statement. “All revenue and earnings from these projects will flow to ERG.”

ERG said it initiated the break and will pay Motorola A$46 million (US$24.15 million) in cash to reacquire the 13 percent stake which Motorola owns in ERG.

In the statement, ERG said it has developed a strong financial position and capability to support its global smart card aspirations on its own. This contrasts with the position in 1997, when ERG needed to strengthen its balance sheet and expand its capacity to support a number of new projects, ERG said.

The two companies will continue to cooperate and maintain a relationship in support of current customers, according to the statement.

ERG is a specialist in smart card-based fare collection projects, but is making a push into the broader multi-application smart card market, the company said.

The company’s boldness in going it alone was not shared by investors. On a day when the company announced a four percent rise in half-year revenues to A$184 million (US$96.3 million), its share price fell 24 percent on the Australian Stock Exchange, to end Monday’s trading down A$0.61 at A$1.87.

ERG, in Perth, Australia, can be contacted at Motorola, in Schaumburg, Ill., is at