PaperlinX has missed its target of $200m to be raised under an entitlement offer in order to cover debts with the company only reaching $150m. Also, the company has reduced the target for the retail component from $100m to $77m.
Net proceeds of the entitlement offer will be used by PaperlinX to repay debt, including the committed $150m reduction in PaperlinX's multi-currency debt facility by May 2009.
The company says this will strengthen its financial platform and support the continuation of its strategy of building on the key competitive advantages in its two business streams of global paper merchanting and paper manufacturing in Australia.
Tom Park, managing director of PaperlinX says, “We appreciate the support from our major shareholders in this capital raising venture during what turned out to be a volatile week in international markets.”
“He says, “We remain focused on completion and commissioning of the Maryvale Mill pulp upgrade, delivery of profit protection plans, sale of European warehouses and the success in our core activities.”
Subsequently, the company’s share price has dropped 22 per cent, settlement of the institutional entailment offer is scheduled to take place on October 14.
In other news, the company has announced that Mark Hooper will be appointed chief financial officer of the company effective as of October 27 to succeed David Lamont.Hooper joined Symbion Health in 2006 as chief financial officer and was also appointed chief operating officer of their Pharmacy Services and Consumer Products division in 2007. Prior to joining Symbion Hooper was chief financial officer for Sigma Pharmaceuticals and prior to that held senior finance and commercial roles with BHP and Ashton Mining.
Thomas Park, managing director of PaperlinX says, “We are very pleased that Mark Hooper will be joining the PaperlinX team. Mark has extensive experience as a CFO of listed companies within the pharmaceutical and mining industries; and has for the past 18 months led Symbion’s Pharmacy and Consumer businesses with a combined turnover of around $3.5bn.
David Meiklejohn, chairman of PaperlinX says that Hooper’s experience and leadership will be an positive addition to the merchant’s management and financial team.
Meiklejohn says, “The Board joins management in welcoming Mark to his new role. He has the financial and commercial expertise required to immediately add value to the PaperlinX operations and to the company’s strong financial and governance systems.”