PaperlinX misses the mark by $50 million

Major blow for PaperlinX as it reaches only $150 million of the $200 million needed to repair debts.

The company's institutional entitlement offer recorded funds of $150 million, raised from new and existing institutional shareholders; but the initial target was $200 million. Managing director, Tom Park, still believed the result was pleasing.

"We appreciate the support from our major shareholders in this capital-raising during what turned out to be a volatile week in international markets," he said.

"We remain focussed on completion and commissioning of the Maryvale Mill pulp upgrade, delivery of profit protection plans, sale of European warehouses, and success in our core business activities."

Net proceeds will be used to repay debt, including the committed $150 million reduction in PaperlinX's multi-currency facility by May 2009.

Park remains positive that PaperlinX can recover following its share prices dropping by 22 per cent. "Recent external factors have turned favourable for PaperlinX, including the weakness of the Australian dollar which benefits Australian Paper and the translation of overseas earnings," he said.

Settlement of the institutional entitlement offer is scheduled to take place next week on 14 October.