This talk of converting the notes into stock may be a waste of time.
Holders can only request that thier PXUPA be converted into shares where there is a change of control event/acquisition event (clause 7.1 of the Hybrid terms).
A change of control event occurs where there is: - a takeover bid - the bidder has more than 50% of PPX and - the directors of PPX have in majority recommended acceptance of the offer
OR under a scheme which would require at leat 50% of votes (Clause 20 of terms).
It is also important to note that Hybrid holders have no right to vote at Paperlinx shareholder meetings.
Therefore, if the PE crowd take out PXUPA, this will not enable them to convert to PPX and dilute existing shares. To do this they would need to get control of PPX which would take a lot more than 9 cents. Once they breach 20% of holding, a whole new set of rules apply to take control. I doubt the balance of holders would be stupid enough to give up control to PE crowd for a decent dollar.
Therefore, I believe the PE deal will not proceed. Unfortunately, I think that (provided they have not breached debt covenants) that PPX will put the PXUPA on ice for a while, while they try and trade out the mess they are in (if they can).
Just my thoughts. Couldn't help but pick up a small holding today at 6.6 cents for a short term trade. Don't have the nerve to hold too many for too long.
SRS Price at posting:
6.6¢ Sentiment: Hold Disclosure: Held
