Eurocontrol Technics Ord EUCTF

RE:RE:RE:RE:little order from SICPA

[kidl2]

frs: There are essentially 2 parts to the royalty agreement.
 
Part 1 is a minimum $1.5 Mil annual guarantee which SICPA has to pay for 6 years. This is payable even if any or all of the contracts which existed at the time the deal was signed were to be cancelled.
 
Part 2 deals with NEW contracts. It calls for a 5% royalty for the 6, respectively 9 year contract period. This 5% royalty is payable IN ADDITION to the guaranteed annual minimum of $1.5 Mil.
 
And this is where Tanzania comes into play ... By classifying the recently signed 3 year deal as a renewal, it falls into part 1 which means NO additional royalty payments to EUO. Had it been classified as a NEW contract, SICPA would have had to pay a 5% royalty in addition to the guaranteed minimum over the 3 year contract period.
 
That’s an estimated $2.3 Mil in “lost” revenue to EUO. Since royalty revenue falls directly to the bottom line (no associated costs to speak of), this foregone revenue would have gone a long way towards eliminating EUO’s ongoing operating losses.