ORBIS & PPX dropped from ASX300
Buy-back urged on PaperlinX
(Link to ABIX abstract of the Australian Financial Review article) 29/08/2011
August 29, 2011 Monday ABSTRACT
"Orbis Investment Management MD Simon Marais says Paperlinx should put dividend payments to investors in its hybrid securities on hold for 3-4 years. He argues that these funds should instead be used to repurchase the step-up preference securities."
MY THOUGHTS: Simon Marais personally own 50% of Orbis and it is the largest shareholder in PPX - Orbis is bleeding to death on this investment.
Marais is just talking his book, however I'd expect the board of PPX will see the bigger picture, including PPX's reputation as a borrower. Even so, a buy back at say $70 today, seems OK to me. Bring it on.
Reviewing the capital structure (hybrids) was mentioned in the AR presentation.
I view this talk as positive as does the market with PXUPA up since pre AR results to $30+; whereas PPX has languished from 11.50 cents down to < 10 cents and now dropped from the ASX300 by S&P.
At time of writing, PPX is 9.7 cents with a market cap of $58.5M. Something must give soon.
Whenever in doubt - follow the money.
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