PaperlinX gets time out from stock trading

Extending last week's trading halt in its shares into a voluntary suspension from being quoted on the Australian Stock Exchange, gives the paper merchant an opportunity to reach an agreement with its European financiers.

In a brief statement to the ASX the company said …

PaperlinX Limited (ASX: PPX) (the  Company ) requests that  a  voluntary suspension be granted by the ASX from the commencement of trading on  30 March 2015 until the commencement of trading  on  Wednesday, 8 April 2015 with respect  to the Company’s fully paid ordinary shares.  

For the purposes of ASX Listing Rule 17. 2 , the Company provides the following information:

(a) the  voluntary suspension is necessary as  a  subsidiary of the Company  is  still  in discussions with  one of its European financiers in relation to  a likely breach  of  a  banking covenant and accordingly, the Company is not yet in a position to make an  announcement regarding this matter.  The Company considers it appropriate that it enters into voluntary suspension so that it can  manage its continuous disclosure  obligations and to avoid the market trading in  PPX securities  happening on a basis that is not reasonably informed ;

(b) the Company requests that the  voluntary suspension continues until the earlier of  the Company making an announcement regarding the matter above and the  commencement of trading on  Wednesday, 8 April 2015 ;

and (c) the Company is not aware of any reason why the  voluntary suspension should not be  granted or  of any other information necessary to inform the market about the  voluntary suspension.

The request for a suspension would appear to indicate that the negotiations with the Europeans are difficult. It is pointless to speculate as to what the sticking points are, but a fire sale of assets would be a very bad outcome.