Forum Archive Index - April 2000

["frank.fernandez" <frank.fernandez@xtra.co.nz>]

FRONTIER PETROLEUM NL                         2000-04-27  ASX-SIGNAL-G

 HOMEX - Perth                                                         

 +++++++++++++++++++++++++
 Frontier Petroleum (ASX: FRO) today announced that it has entered
 into an agreement to acquire what will be Australasia's largest
 receivables management company.

 Under the agreement, and subject to Frontier shareholder approval, a
 $A100 million ($NZ120 million) business will be established when
 Frontier acquires the assets and business interests of Receivables
 Management Limited (RML) and a number of associated companies in
 Australia and New Zealand.

 Consideration will be for a total price of $A80 ($NZ96) million paid
 by the issue of approximately 300 million Frontier ordinary shares at
 a value of $A0.20 ($NZ0.24) each and $A20($NZ24) million in cash.
 Post acquisition of RML and the associated companies, and subject to
 shareholder approval, Frontier will change its name to RMG Limited.

 On completion of the transaction a total of approximately 475 million
 shares in RMG will be on issue and will trade on both ASX and NZSE.

 The acquisition is subject to a number of conditions including due
 diligence and the raising of $A25 million ($NZ30 million) via a
 placement of shares.

 LARGEST IN AUSTRALASIA

 RMG will not only be Australasia's largest receivables management
 company, it will be the first company operating on both sides of the
 Tasman to offer an integrated range of receivables, debt management
 and credit reporting services under a single umbrella.

 Clients who have traditionally had to deal with several agencies will
 now be able to obtain a full range of services from one company.
 Services will include traditional debt recovery and receivables
 management, credit information services together with database
 management, debt purchasing, factoring, ledger management and even
 complete outsourcing of a company's receivables function by deploying
 leading edge internet-enabled technology.

 CULLEN INVESTMENTS A MAJOR SHAREHOLDER

 Once the transaction is complete, Cullen Investments Limited, which
 is one of the vendors of Receivables Management Ltd, will hold
 approximately 27% of the shares in RMG. This will include an indirect
 interest held through its 60% shareholding in ElderCare New Zealand
 Ltd (NZSE: ELD), which is currently a substantial shareholder in
 Frontier.

 Cullen, the private company of New Zealand based investor Eric
 Watson, also has a 9% interest in Strathmore Group Ltd (NZSE: SMR),
 which converts its 43.6% shareholding in CreditNet to shares in RMG
 as part of the transaction.

 BUSINESS MODEL, PRODUCTS AND SERVICES

 Commenting on the announcement, Frontier CEO, John Tarrant, said that
 the target date for concluding the transaction was June 2000. He also
 announced that the chief executive of RMG will be Mr Paul Cooney, a
 30 year veteran of the industry and current national president of the
 Australian Collectors Association.

 "Historically, the receivables management industry has been
 fragmented, comprising many small players offering a limited range of
 products and services," Mr Cooney said.

 "RMG will have the mass, resources and capabilities, unique
 information and intellectual property sufficient to meet all client
 service requirements under the one roof. We believe we will be able
 to lead the industry in meeting the expected demand from both the
 public and private sectors for outsourcing the management of a range
 of functions such as ledger management, debt purchasing and a variety
 of other services including credit information," he added.

 "Larger full-service receivables management companies, on which RMG
 is modeled, have been the norm for some time in the United States and
 Europe. This merger will create a real choice for companies looking
 for world class standards in systems and results. And by leveraging
 the Intellectual capital that already exists in some of the
 constituent companies, we will be able to deploy new generation
 Internet-enabled technology to deliver its services to customers in
 Australia and/or New Zealand."

 POST-TRANSACTION OPERATIONS

 Post transaction, existing shareholders of FRO will hold 19% of
 shares of the new company and shareholders of the merging companies
 will hold 64% with 17% held as result of a private placement of
 shares.

 Gross revenue in the twelve months ending 30 June 2001 is expected to
 be A$57.5 million (NZ$69 million, representing an estimated market
 share of 20% of the combined Australian and New Zealand markets of
 A$280 (NZ$335) million. The growth potential of new services such as
 debtor ledger management, debt management and debt purchasing mean
 that the combined market is expected to reach A$500 (NZ$600) million
 within two years. Based on the capabilities of the new company, RMG
 believes it can capture at least 20% of this.

 Additional growth is also expected to come from the region's A$100
 (NZ$120) million credit information market, which RMG will be well
 positioned to develop. A new part of RMG's service offering will be a
 comprehensive commercial credit reporting service. Consumer credit
 checking capabilities in Australia and New Zealand will also be
 provided through a new RMG-owned company, CreditNet International
 Limited, which will lead the development of a new regional
 information service.

 INTERNATIONAL NETWORK

 Mr Cooney said the new operation's receivables division, trading as
 Receivables Management Limited in Australia and Receivables
 Management (NZ) Limited, will have an international network of 21 of
 its own offices in Australia, New Zealand and Malaysia, and global
 reach through strategic partnerships.

 "The first of these alliances, announced recently in the US, is with
 the world's largest receivables management company, NCO Group Inc
 (NCO), of the United States, he said. "The alliance will allow RMG to
 provide services for NCO's clients throughout Australasia, including
 Malaysia, Hong Kong, Singapore and China. In return, NCO will provide
 services for RMG clients in the United States and Canada."

 STRONG MANAGEMENT TEAM, BROAD GEOGRAPHIC COVERAGE

 Joining Mr Cooney in managing the operating company, Receivables
 Management Limited (RML) will be Mr Wayne Slack from Laurens & Co,
 who will have responsibility for sales and marketing; Mr Bill Duncan
 from Receivables Management (NSW), for business support and
 development; and Mr David Ellis from CSA Mercantile, for e-commerce
 and information technology.

 Executives from the merging companies will also take on senior
 management roles within RML. Mr Kevin Hollister will assume the
 position of state manager in South Australia, Mr Keith John will be
 state manager Western Australia, Mr Terry Clee sales manager New
 South Wales and Mr Ian Coates, special sales manager. Mr Bob Garters
 and Mr Stuart Christie will take the senior management roles in New
 Zealand.

 AUSTRALIAN COMPANIES MERGING IN RMG LTD ARE:

 AMBA (Australian Mercantile Bureau and Agency); Atlas Collections and
 Compass Collections (collectively known as Commercial Debt Collection
 Service); Commander Credit and Collections; CSA Mercantile; Laurens &
 Co; Pioneer Credit Management Services; Procol; and Receivables
 Management (NSW) and Receivables Management (Vic).

 NEW ZEALAND COMPANIES ARE:

 Canterbury Credit Consultants; College Credit Management; Creditnet
 International; Debtor Management (NZ); Northern Credit Consultants;
 and Otago Credit Consultants.

 The new company will have offices in all major centres in Australia
 and New Zealand including Sydney, Melbourne, Perth, Brisbane,
 Adelaide, Auckland, Wellington and Christchurch, complemented by call
 centres in Sydney and Melbourne and provincial Victoria.

 Issued on behalf of the Board of Frontier Petroleum by John Tarrant,
 Chief Executive Officer, Frontier Petroleum NL.

 For further details contact John Tarrant

 Phone  00 61 8 9322 9009 
 Fax    00 61 8 9322 9003 
 Mobile 00 61 414 725 622 
 Email John.tarrant@bigpond.com





   Retrieving the edited text of a company announcement indicates your
acceptance of the conditions. 
                   © 2000 Australian Stock Exchange Limited. ACN 008 624
691.
                            Please read our General Conditions.
                               Last updated 31/01/2000.

----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
To remove yourself from this list, please us the form at
http://www.sharechat.co.nz/forum.html.