PaperlinX primed for PE turnaround - Troubled paper merchant...

PaperlinX primed for PE turnaround - Troubled paper merchant PaperlinX is primed for a private equity bid, according to its major shareholder Orbis Capital.

Jonathan Shapiro

“It’s a classic thing for private equity because [PaperlinX] trades at a huge discount to underlying assets and has a huge turnover so you always think that if you can run it a little better the potential upside is enormous,” said Simon Marais, managing director of Orbis Capital, which owns 18.46 per cent of the company.

“If you can make the company better and just shave a per cent or two off the cost and add it the margin it can make an enormous difference,” Mr Marais said.

Mr Marais said Orbis, a “long suffering shareholder”, was hoping private equity interest would provide a catalyst for some positive changes at PaperlinX, which is in the midst of a strategic review.

“We haven’t looked at [the proposal] because it is tentative. There are a few people looking at the company in more than one aspect. Hopefully there will be some resolution for the company in the new year,” he said.

“One hopes this will flush out another transaction whereby there is an improvement.