buying, page-23

Rick.Wills99 and Scarabbeetles

I haven't been around recently as I've been working on serious options to release value for all PXUPA holders; however I'm prompted to comment on these two postings:

Rick.Wills99 – Isn't it odd that your back-of-envelope value lies within the Waterstone range. Thank you. For the record, that was an independent valuation by Paul Waterstone who is an experienced and acknowledged analyst of industrial equities. It was his work alone without input from any other party or a PIGS peer review before publication. That is fact. I still haven't seen any serious critique of his work.

Scarabbeetles – Comparison with GNS and GNSPA is a spurious correlation as the value of PXUPA doesn't necessarily depend upon “mothership” ppx. PaperlinX now comprises six discrete businesses:

UK
Continental Europe
Australia
NZ
SE Asia
Canada

We know from experience that they can be sold separately as evidenced by the sale of Italy in Feb/Mar 2012 and the USA operations in just one week only in June 2012. If it wasn't one week only then the former board is guilty on non-disclosure. Take your pick.

Also, PPX sold off its CEE operations (Hungary, Slovakia, Slovenia, Croatia and Serbia) in one lot to Heinzel Group in July 2012 for EUR 19.6 million. This sale price represented a multiple of approximately 10 x EBITDA and was A$2m above book value. Net proceeds after debt and transaction costs were about EUR 17.5m (A$21m).

Further, even Toby Marchant was able to sell the consistent loss-making operations in South Africa to local management. Net proceeds of ZAR50m (A$6m) included A$3m repayment of parent company funding and A$3m purchase consideration for the shares, representing a loss of approximately A$2m against book value.

Of the six discrete businesses above, parts of Continental Europe are an acknowledged problem, however the other five are satisfactory to good (Canada & NZ especially in the present environment.

That’s why the only way the true value of PXUPA, and PPX, can be determined is by doing the hard work of a sum of the parts valuation which is what Waterstone did.

From my general, not expert, understanding of GNS it was a one trick pony highly dependent upon massive fundraising for a mill not wanted by a large proportion of Tasmanians and opposed by the Greens in their birthplace – Tasmania.

Comparing these two businesses, PPX and GNS, is simply wrong.

How about considering the facts.