Chairman, directors head for the exit at PaperlinX

SIX months after fighting a bid to unseat him as chairman, Harry Boon will soon depart the beleaguered paper distributor PaperlinX, along with two other directors, Anthony Clarke and Lyndsey Cattermole.

By InvestSMART · 20 Sep 2012

By InvestSMART ·
20 Sep 2012

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The surprise departures follow a board meeting on Tuesday, and leaves just two board members at the $35 million company: Mike McConnell and Andrew Price, the latter just weeks into the job. Mr Price, a paper industry veteran, agitated for Mr Boon's departure at an extraordinary meeting in March.

PaperlinX's chief financial officer, Wayne Johnston, told BusinessDay yesterday the company hoped to announce replacements next week, before the trio's September 28 departure. An announcement on the chief executive's role, currently filled by Dave Allen, will follow.

No reason was given for the directors' departures, leaving analysts and investors surprised. "You've just had half your board walk out the door," one company-watcher said.

PaperlinX's shares closed down 3.9 per cent at 5.7?, taking its year-to-date decline to 32 per cent, as it battles declining demand for paper, currency losses, the downturn in key markets, and concerns over its debt.

The former CEO Toby Marchant, announcing his departure in July at the end of a review, said the company had "taken major strides towards dealing with our significant issues, in the midst of exceptionally hostile conditions". His announcement followed the departure of former chief financial officer Tony Kennedy, and the retirement of former chairman David Meiklejohn and directors James Hall and Lindsay Yelland.

Mr Boon, the chairman of Tatts Group and a director of Toll Holdings, was contacted for comment. He told BusinessDay last month he regularly met with key shareholders Allan Gray and Maple-Brown Abbott, but "no one's asked me to leave".

PaperlinX posted a widened loss of $266.7 million for the year to June 30, from $108 million the previous year.

The annual general meeting is scheduled for October 31.

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Frequently Asked Questions about this Article…

What recent board changes have happened at PaperlinX?

Six months after a challenge to his chairmanship, PaperlinX announced that chairman Harry Boon will depart along with directors Anthony Clarke and Lyndsey Cattermole. The departures follow a board meeting and are due to take effect on September 28, leaving just two board members in place.

Who remains on the PaperlinX board after these departures?

After the announced exits, the two remaining board members are Mike McConnell and Andrew Price. Andrew Price is described in the article as a paper industry veteran who had only been in the role for a few weeks.

Did the company explain why the directors are leaving PaperlinX?

No formal reason was given for the directors' departures in the article. Analysts and investors were reported as surprised by the walkouts. The article notes that Mr Price had agitated for Mr Boon’s departure at an extraordinary meeting in March, while Mr Boon said last month that no one had asked him to leave.

How did PaperlinX shares react to the board departures?

PaperlinX shares closed down about 3.9% following the announcement, at 5.7, taking the year‑to‑date decline to roughly 32%. The company has been under pressure from declining paper demand, currency losses, downturns in key markets and concerns about its debt.

What is PaperlinX’s recent financial position and performance?

PaperlinX reported a widened loss of $266.7 million for the year to June 30, up from a $108 million loss the previous year. The article also notes earlier senior exits, including the former CEO Toby Marchant and former CFO Tony Kennedy.

What are PaperlinX’s next steps for replacing the departing directors and leadership?

PaperlinX’s chief financial officer, Wayne Johnston, told BusinessDay the company hoped to announce replacements before the trio’s September 28 departure. An announcement on the chief executive role, currently filled by Dave Allen, was expected to follow. The company’s annual general meeting is scheduled for October 31.

How should everyday investors follow these developments at PaperlinX?

Everyday investors should watch for the company’s formal announcements about replacement directors and any CEO changes, monitor updates ahead of the October 31 AGM, and pay attention to how management addresses the company’s losses, debt concerns and market demand trends outlined in the article.

Are there any notable outside roles or shareholder connections related to the departing chairman Harry Boon?

Yes. The article notes Harry Boon is chairman of Tatts Group and a director of Toll Holdings. It also says he regularly met with key shareholders Allan Gray and Maple‑Brown Abbott, and he told BusinessDay that no one had asked him to leave.