welcome michael barker to our nightmare., page-17

I agree with Wild bill that the Aussie / Euro price is important to the PPX profitability in Europe .

If PPX buy paper from the mills in their local major markets I suspect it will be in Euro , the 5% shift that has occurred in the last month between the Aussie and the Euro has to be helping them a little bit on the conversion back to Aussie dollars .

One example might be from capital received from the sales proceeds raised gross proceeds of significance and I expect is sitting in Euro .

The recent 5% rise in the euro against the Aussie would have the effect of increasing an Aussie cash equivalent on conversion to the balance sheet of around $2 m if the current price of 82 holds compared to the 78 it was when the sale completed


Australian interest rates would from my understanding having little impact as the major debt on the balance sheet is the hybrids which are paying no interest rate at present , however they would be helping keep our dollar away from 1.05 US and .82 Euro

The debt PPX have is mainly in Europe with ING at a rate that the CFO stated has improved and interest expense is far lower in 12/13 than it was in 11/12 .

The other big balance sheet liability is the perpetual hybrid that currently attracts nil interest cost and could go on for years at nil cost if the PPX board do not generate enough profit to be in a position to want to ever again pay interest to hybrids or dividends to shareholders

I suspect if the new board can make a profit its focus will be on paying down debt that costs .

Should they succeed making a profit and get that debt down to much lower levels I suspect the stage 2 plan will be to focus on a way to work out a solution on the hybrids that does not kill their free cash flow and can be a win win for hybrid holders and ordinary share holders

On another front the 3 directors have elected to get some skin in the game , personally i expected to see A Price increase , and the other 2 directors get a bigger stake than they have to date

As directors irrespective of this their key responsibility is to do everything that thy can to support the PPX business , not the banks , or the hybrid holders needs

Number 1 priority in my opinion is to reduce the costs, reduce the bank debt and return to profit .

If they cant do that PPX holders and PXUPA holders will both end up with the same return .....NIL

I own both PPX and PXUPA .