Faux Restructure, Cash Flow Crisis Coming 2018

Hi All

It is time for us to vote on the proposed Restructure and Simplification this week.  In reviewing debt amounts with another shareholder off line, it is clear there is more to the details of this agreement than what the headlines read.  I am voting against due to the detail (IMHO, tricky) and wanted to elaborate on  the reasons why.  They reasons are:
- Faux Restructure: PAC will issue Northern Lights owners 13,675,677 shares, but Northern Lights owners will still own 35% of Aurora Trust (see page 4 of the Restructure, simplification announcement second column page 3).  XRPU's will have to be paid before PAC gets 100% ownership of the Aurora Trust.
- Coming Cash Flow Crisis: PAC have a lot of debt due in 2018 under this Restructure.  There is just under $50 Million in debt due in 2018 (instead of $21.54 Million for the Seizert Notes only).  Furthermore, with PAC only still owning 65% of the trust even after a positive vote, the ability to pay debt off will be limited as every dollar paid out in distribution or raised from Asset Sales from the trust 35 cents will still go to Northern Lights, unless the XRPU's are paid out before hand.
- No dividend despite the talk:  The PAC Board can't pay out a dividend at the end of this year and be fiscally responsible due to the 2018 Cash Flow Crisis.  A dividend is unlikely to be able to be paid out until March 2019.  To be conservative I am factoring in a dividend payment in March 2020 when they have paid off all debt.  If debt was due payable over 5 years then it would be a different story.
- Need to raise capital:  The PAC board will have to issue at least 8 Million new shares which will require shareholder approval as it is 20% of the shares on issue (or not like they have done previously).  Expect your shares to be diluted more dependent upon how the market rates this stock after restructure and the market realises the Restructure, simplification isn't really what it was meant to be.  I think under $4 in the short term.
- Northern Lights Partners get 67.72% of future cashflow and asset sales:  With Northern Lights owners getting 13,675,677 shares they will own 32.72% of PAC.  They will still own 35% of the Aurora Trust until XRPU's are paid out.  We are in effect selling the farm for no return.  There is no incentive for Northern Lights to reinvest the future proceeds from the sale of businesses (including Raven Capital) back into the Aurora Trust structure.

Here is further information on the pending cashflow crisis:

	Column 1	Column 2	Column 3
0	Liability (Current and Non-Current due)	Amount Outstanding ($AUD)	Interest Payable
1	2017 NOV - Aperio	$6,200,000	@7.25% - $449,500
2	2018 MAR - XRPU	$27, 450,000	@0% if paid on time
3	2018 NOV - 50% Seizert Capital Notes	$11,745,000	@ 6.81428% - $1.581M
4	2018 NOV - Aperio remainder	$7,300,000	@7.25% - $1.0585M
5	2019 NOV - 50% Seizert Capital Notes	$11,745,000	@ 6.81428% - 2.232M

Notes for the above table:
- assumes AUD/USD rate of $0.754
- have rounded up to the nearest ,000

The cashflow issue arises as the Aurora Trust only has $28.627 Million Available-for-Sale Investments (pg 35 of latest Half Yearly results), if we reduce this by 35% PAC shareholders will only have $18.608 Million to pay off debt.  Not enough to fully pay out XRPU's, the trust will need to reduce its Cash at Bank and this will be reduced due to Aperio Payment of debt in 2017.  Note, I am basing the distribution of cash after sale on what occurred with RARE, not sure if the conditions of this agreement stipulate all asset sales go to the settlement of debt, it doesn't appear clearly in the agreement anywhere.

The above is in my opinion and you should do your own research before making a decision.  If you have already voted you can change it by going into the Investor Centre.  I believe voting against the resolutions will make this company stronger and ensure an amicable agreement can be made without the current PAC owners being displaced financially.

Best of Luck
Lost