pxupa 8 days to convert

Just took the time to read the half year results in depth and watch and listen to the CEO , Chairman and CFO discuss the performance of the business and the hybrid issue on the PPX website.

In addition I had a conversation with a Broker that spoke directly to the Chairman this afternoon in Melbourne about the Hybrid offer and upcoming closing date for acceptance of the notes .

Firstly the results

Positives are debt rollover extended out to 2016 , so no pressure on cash shortage .

All countries showed improved EBIT

Operating EBIT expected to be positive in current period , but not enough to have a full year positive result

NON paper sales now make up 20% of revenues

Overall revenue stable despite less operating countries now under PPX control

In excess of 500 FT employees are gone with
the cost of this is accounted for in this period

Aust/ Canada and NZ all doing very well off lower cost bases yet to

Bennalux out of the woods as a going concern

Germany improving

Negatives

The low take up of the PXUPA 250 for 1 offer .

UK

In respect to the 250 for 1 offer there is no doubt the board of PPX tried to come up with what they felt PPX holders would accept and what was a fair offer to give around 51% ownership to hybrid holders .

After listening to the chair chat there is no doubt that they are disapointed in the acceptance rate to date but also there will be no further offers coming from PPX once the 28 Feb date passes .

Management are now required to focus all efforts on the business and return to profitability and Hybrid holders will be left to hold their junk bonds hoping a collapse occurs , which on todays improving performance results seems unlikely for at least 2 years or for PPX to continue to turn it around

In my view once the date passes PPX directors will make harry boon look like the friendly guy and will have no interest in paying a dividend , but will focus efforts on reducing bank debt, and making acquisitions from cash and good debt .

Bought PXUPA today to convert some more before its to late .

I suspect the shares will rise post Feb 28 from 4c to 6 or 7 and the current 250 for 1 discount $9.00 will balloon back to 100 for 1 as it was for almost all of 2013 where hy brids drop towards $7.00 when their options are gone

ST buy opportunity in my view on hybrids to convert