Bill Express Pulls The Plug
The Age
Wednesday July 9, 2008
ANZ will write off $53 million of debt following the collapse of Bill Express, but the bank has already acted to salvage most of the network of 4700 payment machines at newsagents and other retailers across the country.
The Melbourne-based company, whose shares have not traded since May 1, appointed Craig Crosbie, of PPB in Melbourne, as administrator after a meeting with creditors yesterday morning - a meeting triggered by Bill Express' disclosure that a crucial deal to recapitalise the company had collapsed.Bill Express, whose No.3 shareholder is retailing magnate Gerry Harvey, built a national electronic payment network with $1 billion annual revenue and $40 million earnings from processing bill payments and selling prepaid mobile phone credit.That empire collapsed after Saudi Arabia-based Al-Othman Group cancelled its planned investment in the debt-stricken company.PBB was appointed as an adviser by the board last month, as the company tried to find a white knight to resolve its woes.ANZ confirmed that it would write off the $53 million it is owed by Bill Express - yet another financial and reputational hit for the bank, which has suffered through the woes of Opes Prime.In addition to the bad debt, ANZ yesterday revealed it also owned 13.2% of Bill Express, having seized the stake from stricken broker Chimaera Capital.ANZ will install 2600 Eftpos machines at newsagents and supermarkets across the country in the next 48 hours to prevent rival banks from winning part of the lucrative electronic payment network.Every Bill Express machine has an ANZ Eftpos unit attached, and the bank earns a fee from each transaction. In doing so, ANZ has effectively seized part of the Bill Express network.Bill Express has contacted newsagents instructing them to "suspend vending all prepaid products, processing any bill payment transactions or taking any bopo (credit) card top-ups until further notice".The solvency of Bill Express came under scrutiny on April 30 when it revealed that Optus had stopped supplying the company with prepaid mobile recharge vouchers "on the basis of a failure to pay an amount owing to Optus", although the company disputed the debt.Since that announcement, Telstra has only supplied prepaid credit to Bill Express if it was paid in advance.BusinessDay believes Bill Express' debt to Telstra is about $10 million. The telco's spokesman, Peter Taylor, said the amount was "not material".While Telstra customers can buy prepaid credit through many retailers and ATMs owned by ANZ, Westpac and NAB, Optus has fewer recharge outlets. Vodafone would not comment.Bill Express outlets will have ANZ Eftpos units installed free from this morning, and will also receive three months' free use of the equipment as an "act of good faith" from the bank."ANZ is providing merchants with replacement terminals following the appointment of administrators by Bill Express directors and the instruction by Bill Express to merchants to suspend vending all products," said ANZ spokeswoman Cherelle Murphy."The Eftpos network is the key asset for us."We were concerned that Bill Express would collapse, but have a plan to protect that network."The listed parent company of Bill Express, On Q, issued a one-line statement to the sharemarket. "In light of the announcement made by Bill Express today, the directors are reviewing the position of the company and expect to be in a position to make further disclosure tomorrow."The Australian Securities and Investments Commission is compiling a dossier about transactions made by Bill Express, listed parent company On Q and businesses in the Philippines and the United Arab Emirates, amid claims that funds may have been transferred overseas.
© 2008 The Age
