Yesterday’s announcement was more evidence that the wheels turn...

Yesterday’s announcement was more evidence that the wheels turn slowly at PTN. But the underlying message must be of concern to all as it was repeated several times....cash is tight.

Here’s the burning issue for PTN: Does it really have enough cash flow to service its debts if things get worse?

For mine, PTN is one step away from been placed in "intensive care".

Look at the evidence...the bankers behind the loans that are in LVR default want more security...the manager of the core assets (worth $600m...but the return is bugger all) is tardy in their monthly payments...the non-core assets aren't selling...but now they are been aggressively marketed...which means knock-down prices in order to solve the want for cash.

But the good news (???) is that Kidder Williams who are the “Responsible Entity” have decided to give one of their own companies the right to operate the villages previously operated by the group they have just tossed out.

Do they have the experience or are they just been greedy?

Yes, PTN is a company where the sum of the parts is worth a lot more than the whole...but the trouble is “unlocking that value”. It’s wrapped in a very undesirable corporate shell. Plus, the present board don’t appear to have that ability and are moving at a snail’s pace when compared to rivals.

I feel that the market won’t buy PTN properties because they are expecting a fire-sale and this announcement as good as confirmed that this is now underway.

No wonder the share price tanked yesterday.

PTN: Asset rich – cash flow poor. And with bankers who are now starting to ask for extra assurances from a company that really doesn’t have a reliable cash flow source. Not a good situation and I would urge all those who hang their hat on the scenario that even if it is broken up/liquidated/sold off, they will make a profit.... to think twice.

This market is tough and assets that need to be sold will attract deep, deep discounts. No question, there are buyers out there (LLC and SGP for starters)...but they are waiting for the noose to tighten, the hurt to heighten and the resolve to weaken.