We basically have a stale mate of at least 4 variables .Not sure...

We basically have a stale mate of at least 4 variables .

Not sure if you can have a stale mate with more than 2 variables , but nonetheless I see at least 4 variables that are impacting a resolution .

Variable 1.

PPX directors wanting to focus on the operations of the business and provide value to shareholders in PPX the best outcome on their current investments .

These directors openly realize the outstanding Hybrids are a hindrance to the balance sheet and restricts managements ability to repair the business as efficiently as they would like to do .

These directors have stated that their obligation is to the business and its shareholders and as such are not prepared to hand over the business ownership at an unacceptable ratio to satisfy the Hybrid holders claims .

These directors do realize there is a benefit to address the Hybrids , but wish to focus on what is best for the business and PPX shareholders in to the future .

The PPX board appear to have an appreciation for PPX and PXUPA past capital losses on their investments , however they cannot rightfully deal at a price that is to far astray from what the market has valued the Hybrid investments at during their time at the Helm .

Variable 2

PPX shareholders who want their shares to rise and invested in the company .

It appears these shareholders have varying views on the benefits of making an offer to Hybrid holders .

I suspect most shareholders recognize there are benefits to alter the terms of the Hybrids to accommodate the boards call to repair the balance sheet and a share swap appears to be the most acceptable .

I suspect there is another group of shareholders within PPX who believe they are better served by adopting the previous boards stance . These shareholders want the board and management to spend all their time working in the business fixing the business and want the board to ignore the calls from Hybrid holders on the basis this liability is a zero coupon bond , and costs PPX nothing other than headache , but they want the board to deal with the requirements of PXUPA later , when they believe the business and share price are in a better shape , that is when when the operations are EBITDA positive as predicted by the board in 2014

3. The third variable is PXUPA holders that PIGS represent
( not sure what % of PXUPA holders that actually is ) . PIGS offered up 6 or 7 scenarios one of which was calling for a share swap that handed PXUPA upwards of 75% of the company , something in my view the board of PPX could never offer under their charter as responsible directors of PPX .

PIGS are aggressive in their commentary of the down side of not making a palatable offer for Hybrids on the basis ignoring the Balance sheet and Hybrids moral obligation is making the repair of the business near impossible .

4. The final variable is of course the market . Some say the market is always right , but unfortunately parties on either side of this stoush are not open to accept the markets value of each other meaning that the stalemate could continue for years .

PXUPA holders according to PIGS , Coastal and other posters have laughed off the Trust Co valuation method of assessing the current fair value of PXUPA , as the market price $7 at 30/6/2013 .

This talk has actually had the impact of lifting the PXUPA price above medium term ratio conversions and discounted the PPX stock probably on the basis a few traders have bought i to PXUPA hoping an offer of more than the markets fair value will occur

That market fair value has basically valued PPX between .05c and around 0.14c since the previous boards days were up in 2011/12 .

In the same period the PXUPA has been valued between about $7 and $18 .

Summary

It seems there are to many variables and all parties don't want the same result

I suspect PPX will make an offer of a shares conversion we at the $7 value equivalent as mentioned by the Trust co as fair value , and note holders will reject it by more than the 25% required to defeat it

Where it goes from there is the stale mate that I suspect will go on until PPX is either dead , offered a take over by a new party or profitable and in a position to better offer up shares but at a multiple that shares the company 50/50 or 40/60 as mentioned in the AFR the day after the company announced its intention to make an offer to PXUPA holders.

PPX and PXUPA holder