cone of silence - peace, page-28

I agree with forced conversions. But in reality they often give you two equally bad choices. I remember BBI (babcock) and the hybrid BEPPA. They eventually got "forced" into 42c in the dollar. It was a significant premium on the 7c it was trading at but well below the $1 face value. And BEPPA had more advantageous terms. It did have an expiry date. And the missed interest payments accumulated into the face value.

But the takeover which was a conversion event was sold to BEPPA holders as a take it or leave it option. Leave it and you go belly up and get nothing.

PXUPA would be the same imo. The $285mil liablility is just too much for a preditor to payout in a take over event. But if they wait until NTA drops further, holders will see the light. That $40-$50 is better than nothing in administration.

If their were fewer PXUPA, then I think face value is achievable. Because PPX has large revenues, and could be appealing to the right buyer. Especially if broken up and if synergies can be found with a takeover partner.

I can't see any breach of covenants breaching the conversion terms of PXUPA. And I dont see a takeover happening unless PXUPA take a haircut. A suitor will just walk away.

PXUPA have some power because they rank higher than PPX and they can basically block a take over due to their high conversion price. But that power is diminished when their is no competition for the assets or company and suitors are happy to walk. It's about finding that balance. Which I suspect is in the ~$50 range.

Even a completely optional buyback/conversion would need to be in that range imo to get any serious acceptance. I doubt $30 would cut it.

I think we talked in the early days by phone or a few email echanges. Didn't realise you were Melbournian until Firsova mentioned Crown. So might look you up when it's less busy. Cheers.