PaperlinX PIGS want to shift goalposts

Disgruntled investors seek to change the terms of the constitution of their Trust in order to raise the heat on PaperlinX ahead of its AGM this month.

The prospect of another extraordinary general meeting, last one in 2012, forced on PaperlinX by its hybrid investors comes ahead of a proposed offer by the company to resolve the issue. According to Graham Critchley, convenor of PXUPA Investor Group Supporters (PIGS), the attempt to change the constitution is the result of a long-standing plan and not a knee jerk response to the company’s recent offer to negotiate a settlement.

The PIGS want to take control of the agenda in order to call an extraordinary general meeting before the company’s own annual meeting. Spokesman for PIGS, Graham Critchley is accusing the legal representative of the investors, the so-called Responsible Entity, of being in the pay of PaperlinX and acting in the company’s interests rather than that of the hybrid holders.

On the activist website he writes… If the Responsible Entity has to take instructions from PaperlinX, then this is yet another example of its conflict of interest. Its fiduciary obligations are to the members of the Trust - PXUPA holders - yet it is paid by and takes instructions from PaperlinX.

The fixed amount owed to the hybrid investors becomes more significant as the share price of PaperlinX, currently six cents, continues to fall. The company, under new CEO and former shareholder activist, Andrew Price, is compiling an offer for the hybrid investors to swap their investments for shares. Critchley maintains the offer will be unacceptable, even before it is formalised.

The long running saga continues against the backdrop of hard times for the company, especially in Europe where legacy issues and industrial regulations are hindering Price’s attempts to right-size the business.

Watch this space.