No dividend for Dec but may a buyback be on the cards?
If so then not paying a dividend makes strategic sense.
Following ex the AGM
STEP-UP PREFERENCE SECURITIES
In relation to the Step-up Preference Securities (SPS), the Board has determined that the PaperlinX SPS distribution for December 2011 will not be paid.
This reflects a prudent approach to cash management given the challenging trading conditions we have encountered in
this first quarter and other ongoing demands for our cash, including our restructuring activities.
Whilst decisions on future SPS distributions will be made at the relevant time, until there is a significant improvement in trading conditions and the Company’s financial performance, it is unlikely that further SPS distributions will be paid.
We are acutely aware that both ordinary shareholders and SPS holders are not seeing anadequate return on their investment. One of the major drivers, and intended outcomes, of the strategic review is to create a more robust capital structure which will enable an improved return to investors.
All aspects of the business and capital structure are being reviewed and a number of alternative actions are being considered and evaluated. This could include a possible divestment of certain assets, which would generate additional funds.
With respect to the capital structure we have received significant commentary and queries around a possible buyback of the SPS prior to a Remarketing Date. Whilst no decision has been taken, it is one of the alternatives which is being considered.
PXU
paperlinx sps trust
