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Investment banker deals new hand in PaperlinX hybrid poker game

Tuesday, 03 September 2013
By Print 21 Online Article

A  meeting in Sydney between representatives of PaperlinX and the company’s hybrid investor support group (PaperlinX PIGS) has failed to agree on terms for the conversion of the hybrid shares into company stock.

The disagreement dashes any hopes of a quick resolution to the ongoing stoush between the company and the disgruntled PIGS. Sources tell Print21 the disagreement on the value of the conversion was wide and ostensibly irreconcilable.

The high level meeting included representatives from investment bankers Moelis & Company and sought to carry out PaperlinX recent offer to resolve the conflict.

In an analyst briefing to the ASX  last month the company committed to rationalising its capital structure and the complex, sub-optimal equity ownership and capital structure relationship that exists between PaperlinX and the Hybrids and its impact on the value proposition for all stakeholders. It is the Board’s belief that a simplification of the capital structure is fundamental in unlocking value for both PaperlinX ordinary shareholders and Hybrid security holders.

The company indicated its preferred solution was an equity swap; hybrids for  company shares. The rock bottom price of the hybrids at $11.00, originally priced at $100.00 has attracted a very different type of investor from the Ma and Pa shareholder that originally bought in. With the PaperlinX share price currently at five cents the shares and the hybrids are in play.

Attention now turns to the AGM in October when a decision one way or the other should be known.

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