Socrates99Along with many others here you still fall for the...

Socrates99

Along with many others here you still fall for the “market value” argument about PXUPA vs its “balance sheet” value.

A $285 million liability on the balance sheet cannot just disappear.

PaperlinX cannot be “turned around” with a crippled balance sheet. At present the business is beholden to its bankers with their cross covenants, major suppliers (both sapping working capital) and credit insurance (sapping profits).

Hardly conducive to profits even before addressing the long term problems of the industry generally and the transitional problems of PaperlinX specifically.

Just as the hands of PXUPA holders are tied, so are those of the board and PPX holders.

Any opportunistic offer to PXUPA holder will fail due to the 25% blocking limit. This was proved in January 2012 and will be proven again.

If such an offer is ever made, it’ll be supported by plaintive calls to “save the company”. The hybrids have saved the company for the past three years and the new board well know this.

If they plan a dirty tricks campaign, expect fireworks.

Elsewhere nathanblack said: “Crush them until their spirit is broken then offer a olive branch in the form of conversion.”

Theoretically that will work, except that the bankers, credit insurers and suppliers may have an opinion too.

But do you really think Andrew Price and his supporters are going to hang around for the length of time for this to happen? What is also often neglected is that there are enough ‘hard core’ PXUPA holders that can outsit Andrew Price.

Andrew Price is ambitious and has a healthy ego. Most would have read the recent article at http://www.printbusinessmagazine.co.uk/news/PrintBusiness91482.ink

“Andrew Price was buzzing in London last week, styling himself as the saviour of print, not just the paper merchant.” WOW.

I don’t see him at PaperlinX for a long time, just a good time. He could walk tomorrow as his cash investment is very small relative to his net worth.

It’s now apparent that Andrew Price and his backers underestimated the problems in Europe and the UK, and specifically the industrial relations challenges in Europe.

Otherwise we should have heard by now specifics about matters raised by former chairman Barker and CEO Dave Allen in their speeches at the AGM last November. Take a moment to read it again

http://asx.com.au/asxpdf/20121115/pdf/42b6mvr2bxfnvb.pdf

Remember what Dave Allen said “If we cannot fix our loss making businesses in the Netherlands and Germany we will sell them.” (page 10).

It appears that they can neither fix nor sell them; besides it’s more fun buying businesses in Sweden and attending glitzy launches of the Car Wrap Club.

After all it was easy to sell Italy, the USA (in just 5 days), South Africa and five countries in Central and Eastern Europe; 8 businesses generating $88 million in cash (see page 8 of Dave Allen’s speech) but they cannot sell the Netherlands and Germany. WHY?

Best everyone remembers to ask that question at the 2013 AGM.

Speaking of Messrs Barker and Allen; has anyone seriously stopped to consider:

(1)Why was it necessary for Michael Barker to relinquish the chairmanship in favour of Robert Kaye after just six months?

Normally when chairman step down they usually retire from the board. Must be some internal politics at work. Read the ASX release here

http://asx.com.au/asxpdf/20130402/pdf/42dzwf0q4pgptm.pdf

then try to convince me otherwise.

(2)It’s obvious to all that Andrew Price is running the show so why isn’t he MD? Must be more internal politics at work.


Maybe the hybrid holder should buy a controlling stake in PPX. Who knows what might happen then!