pigs, page-47

Blues,
There may be a few problems with your scenarios




"1......Prevents any posibility of future conversion of PXUs (at $100/PXU) which, based on current $0.08 SP, would basically wipe out existing PPX holder equity via dilution

2......If PPX can buy PXUs at a discount to $100 face value then the NTA attributable to PPX holders increases by that discounted amount eg Immediate increase in NTA of $0.08 /PPX if PXUs bought back at a $50 mill discount

3......Enables dividends to be paid to PPX holders without having the current restriction of PXU's being paid for 2 prior periods before a PPX dividend can be paid.

4......Increased NTA/PPX (in 2 above) will provide more time for PPX to recover.

5.....If PPX continues on its current path, then a wind up may be on the cards. IF so, then PPX likely to receive $0 as they stand behind PXU."


Hard to see where the money would come from, to pay out the pxus
What interest rate would you be asking for, to lend ppx money?
Well north of the present hybrid rate I would think.
And ppx doesn't pay any interest on the pxus, and doesn't have to, or convert, until it feels like it.
Free money.

On 4 and 5 above,
fixing their "nta" by borrowing to pay out hybrids, will do nothing to improve their chance of survival, in fact, it makes it more difficult, by adding extra interest costs.
PPX's survival needs the business to improve.
Or it needs to be taken over.
The only argument will then be, how to split up the cake.

Not going to be worthwhile for the ords if the hybrids get 100 bucks, not really worthwhile for the hybrids if they get less than $40?

Also hard for me to get excited about any accounting NTA, call the goodwill zero, discount heavily any stock value, perhaps also discount accounts receivable, and the NTA plummets.

cheers