What a despicable continuation of value destruction.
Interesting to note there was little said about the quality of debtors - there is further risk to stated net assets if (as I suspect) a portion of their European customers have payables to PPX which will never be repaid. Only the elusive comment on focussing on profitable customers allows me to draw the allusion which is obvious.
I wonder what the going rate would be for on-selling their trade receivables in Europe? This is an important question for any investor because in a wind up scenario, there's a real risk the actual amount recovered from running off the book is much less than what's on the balance sheet, and contingent liabilities higher than stated, meaning a realised NTA very different from the reported.
For what it's worth, PPX ordinary equity should only be worth what a hypothetical 100% holder of all PXUPA would be willing to pay for the ability to take voting control and initiate a wind up, thus burning their entire investment in PPX in the hope that the liquidated value paid to PXUPA compensates. You would then have to calculate the profit (liquidation value to PXUPA - cost of buying ordinary equity - cost of total investment in PXUPA) and determine how much is fair to give the ordinaries for their voting rights - which declines so long as PPX continues to destroy value.
A complex solution would be to gather as many PXUPA holders as possible into a consortium, form a company which buys their PXUPA 1:1 for consortium scrip, then does an equal access capital raising and uses the funds to take out PPX ordinaries, thus enabling liquidation to be initiated.
Obvious free-riding issues here, but have been thinking about how to break the impasse and this seems one of few viable options.
A penny for any thoughts.
Xavier
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