Fellow PXUPA holders
I am not as confident that the future is brightening for SPS holders. At the AGM they stated that distributions are unlikely to resume until business improves and I think also that nothing will happen before yet another 'strategic review' is undertaken for completion in 2012. So IMO that eliminates the June 12 distribution as well (as much as I'd like it to be paid).
In 2012 they may as well step up the margin: as nothing is going to be paid. If they don't pay at the current margin they are hardly going to pay on a higher one.
PXUPA holders could be looking at no payments for at least another year minimum. Clearly many are contacting them about a buyback, so much so that they had to pay lip service to it as a concept.
They can only go forward with the ordinaries once they deal with the SPS. If they attempt a capital raising, who will invest when dividends are locked out for two SPS payments? But again there seems to be no action or thought coming through on the capital structuring. Such a review could be done in a month so talk of fiscal 2012 really shows how directionless the company is.
Given the gross underperformance of the company's securities, someone might sharpen their pencils and make a bid for it. But again this is likely to be in the form of a scheme so the PXUPA can be dealt with below $100.
So where to from here?
In my opinion, the PXUPA are less attractive now that distributions have been suspended again, coupled with the statement that we wont be seeing them resumed anytime soon. We can all sit tight and hope for a buyback. But if they had a plan,any plan, then we would have heard it at the AGM and we didnt. Capital structuring is not rocket science and the alternatives available are well known and finite. But the company came up with nothing other than some sort of 'review'.
Investors are always faced with the quandry: sell out at a material loss or hang in there hoping. I'm a great one for hope--but the board holds out nothing timely so I'm selling some of mine and putting the cash elsewhere.
Lizard
(and of course Lizards run hot and cold so form your own views rather than rely on a mere reptile!)
PXU
paperlinx sps trust
