eisa Reaches New Lows

ISP eisa has indicated it may turn
towards legal action in an attempt to recover AUS$20 million (US$12
million) deposit the company paid for the proposed deal with OzEmail.

The company issued a statement to the
Australian Stock Exchange reporting it had
written notification from OzEmail which “purports to terminate the business
sale agreement made on 10 March, 2000 between UUNet Technologies Inc,
OzEmail Pty Limited, eisaOz Pty Limited and eisa Limited with immediate
effect”.

eisa said this notification had “asserted that the $20 million deposit
paid to it by eisa Limited under the business sale agreement will be
retained by OzEmail”.

Earlier in the day, eisa called a trading halt on its shares pending a
further announcement, stating its shares would remain in a pre-open state
until the start of normal trading on June 5, when an announcement would be
released.

The ISP’s shares have fallen lower again as market speculation over the
potential takeover of OzEmail continue to hang in the balance, the latest
in a series of blows for the company.

Earlier today WorldCom ISP UUNET
announced it had terminated the company’s agreement to sell the OzEmail
Internet business to eisa.

Under the agreement, eisa was required to have financing commitments in
place last month, but UUNet said “it is clear that eisa is not in a
position to meet that requirement”.

“UUNet believes the OzEmail Internet business remains strong and fully
intends to continue operating the business. Any alternative transaction
involving the OzEmail Internet business would only be considered if the
right opportunity were presented,” the company said in a statment.

Earlier in the week, major content provider John Fairfax Holdings pulled
out of a major proposed deal that would have seen eisa gain further capital
to complete the OzEmail acquisition (see
story
).

And last night, company chairman John Pascoe and director Michael Ball
quit due to poor health. In a late statement to the ASX, eisa said Pascoe
had been admitted to a Sydney hospital suffering meningitis and Ball was
suffering heart complications.

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